End the Firefight: Make Pricing a Supply Chain Signal
When pricing decisions land without warning, supply chains absorb the shock. Leading organisations are bringing pricing into their planning rhythm to protect fulfilment, reduce firefighting and improve cost-to-serve outcomes.
Pricing decisions rarely happen in isolation – but in many organisations, they’re still treated that way.
Supply chain teams often bear the brunt. A price change is agreed in commercial and dropped into the forecast, then handed over to be executed with little warning or preparation. The downstream impacts usually aren’t visible until they hit the real world. And by then, it’s too late to plan around them.
The consequences can be serious. If you’ve been in supply chain long enough, you’ve likely experienced – or at least heard – a pricing-related horror story. We know of one promotion triggered without any input from the supply chain team, which resulted in last-minute airfreight to meet an unexpected demand spike. On paper, the campaign looked like a success; however once fulfilment costs were factored in, the margin was gone.
Far from being isolated incidents, these horror stories reflect a common pattern: pricing decisions made without operational visibility, and supply chain plans built without full knowledge of what’s driving demand.
That disconnect is becoming harder to ignore, especially in a market where margin management is quickly becoming everyone’s job. Pricing is now a demand signal, a supply chain constraint and a key input into product flow. When that signal isn’t shared or tested early, the flow-on effects are difficult to absorb.
Price without planning
As many supply chain leaders will tell you, one of the core issues is that demand doesn’t always respond to price changes in predictable ways. There’s often an assumption that a price cut will drive a proportional increase in volume – however, in reality, elasticity is rarely that tidy. It varies by category, channel or customer segment. When those assumptions go untested, supply chain teams are left scrambling.
That kind of disconnect has real consequences: one region ends up with excess stock, another is scrambling to catch up, or fulfillment plans move into emergency mode. Often, the issue isn’t that demand changed – it’s that the assumptions behind the pricing decision didn’t hold. Some organisations are starting to test these assumptions more rigorously, using historical data or simple scenario models. However, that only works if supply chain is brought into the process early enough to shape the inputs.
It’s tempting to assume this is about systems and tools – however, that is not always the case. Many businesses have forecasting systems or planning platforms capable of simulating pricing scenarios. The gap is usually in timing and coordination. If pricing changes are communicated after they’re agreed, there’s no opportunity to model what those changes will do to volume, cost-to-serve or inventory positions. At that point, supply chain is stuck in reactive mode.
Bringing pricing into the planning rhythm
The answer is simple, although not easy: integrating pricing into the planning rhythm. That means ensuring pricing decisions are part of the S&OP or IBP cadence, with scenario testing included before the price is set, not after. It also means giving supply chain teams the context to understand why price is moving – is it a strategic repositioning, a competitive response, or a clearance strategy? That context changes how teams prepare, especially when it comes to inventory positioning and network design.
There are some clear commonalities between organisations that are doing this well. Pricing and supply teams co-develop the plan, rather than handing it off once decisions are made, and teams proactively model the expected volume impact of different pricing moves. They also test whether fulfilment networks can support a proposed change, and they build mitigation plans where needed.
While supply chain will never have full control over pricing decisions, it does need a seat at the table. Without early visibility, teams are left to absorb the impact with little time to adapt. More often than not, that means firefighting: chasing inventory, expediting freight, or rewriting fulfilment plans on the fly. And ultimately, all that unplanned effort chips away at the margin those pricing moves were meant to drive.
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