NLPP (Non-Linear Performance Pricing) is a new kind of decision-making approach in purchasing, engineering and sales. NLPP finally allows a different perspective looking at price & cost in relation to value, benefit & performance. NLPP extracts the maximum insight from your product & service data into highly accurate target price predicting formulas. 21st Century Algorithms: Calculate very precise target prices with worst and best benchmarks for any kind of products and services procured. Fast: Analyze hundreds or even thousands of purchased items in a few seconds and see potential savings right down to an individual item. Predictive Analytics: Predict the impact of strategic decisions such as changing suppliers, target prices for new products, upfront negotiations. Price / Cost Estimate: Engineers calculate highly precise prices estimates in early stage development when no drawings or BOM is available. Similar Parts: No matter if you have hundreds or thousands of parts, NLPP can find technically similar parts in seconds. Price Performance Effect: Understand how performance parameter changes impact the price and on which features it makes the most sense to focus on. Value Based Pricing: Sales create target group specific value based pricing models and shifts discussion about the price to value. Quotes: Use NLPP precise target price formulas to calculate quotes in seconds and save a lot of time. Price Consistency: Ensure price consistency for your customer portfolio no matter who calculated a quote or offer.

1. Non-Linear
Performance Pricing
(NLPP)
The smart price analysis solution

2. THE SAPHIRION MISSION:
OUR CLIENTS MAKE OPTIMAL GAINS
FROM THE DEEPEST POSSIBLE
INSIGHTS INTO THEIR DATA.
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3. NLPP analyzes all kind of product prices according to customer value / benefit / performance and
shows you immediately which products or services have a good or bad price / performance ratio.
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4. For an NLPP analysis, the performance / value of the products is specified by the features &
characteristics important for the user.
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Number of Cylinders
Power
Capacity
Life time mileage
Charging Time
Capacity
Volume
Voltage
Weight
Life Time
Volume Efficiency
Part Design
Number of Parts
Weight
Torque
Max. Revolution

5. NLPP uses the magic of mathematics in order to find out how selected product properties influence the
price and comes up with a target price formula using those selected properties.
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Charging Time
Capacity
Volume
Voltage
Weight
Life Time
Volume Efficiency
Part Design
Any sufficiently advanced technology is indistinguishable from magic.
-- Arthur C. Clarke, (1917–2008), English science fiction writer

6. NLPP benchmarks prices by customer value and performance, hence shifts the focus from a “discussion
about costs” to a “discussion about value”.
Manufacturer
Pricing is resource driven and
based on cost-calculation
(Cost of Production)
Purchasing
Seeks for parts with specific
functions and properties with the
best price performance ratio.
Cost ⇾ Value
(NLPP)
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7. NLPP calculates prices by customer value and performance, hence shifts the focus from a “discussion
about pirce” to a “discussion about value”.
Customer
Prices are consistent with the
performance and comparable
Sales
Argues with benefits and
uses consistent price-
performance ratio
Value ⇽ Price
(NLPP)
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8. Engineering(NLPP)
Evaluation of alternatives while
maximizing customer value at
optimal costs
Since NLPP evaluates performance changes in monetary terms, your engineering perspective expands
to include market and customer information for optimal product design.
Market Information
(NLPP)
Customer Information
(NLPP)
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9. NLPP thus connects purchasing, engineering and sales through a uniform method which quickly and
accurately assesses the value of prices & costs.
Purchasing
Benchmarks, potential savings,
relocation, price consistency
Engineering
Price estimates, similar parts,
cause effect relationships
Sales
Value based argumentation,
consistent pricing
Which products
have potential
savings and
how big are these?
What is a justified
price for a new
specification?
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10. The „magic“ about NLPP is that it finds the best price predicting formula using your data and
calculates the target price for every part number.
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Price Driver,
Quantity Target Price
Price Predicting
Formula
Price Driver,
Quantity &
Actual Price NLPP
€ = p0+p1x1+p2x2
€ = p0+p1x1+p2x2

11. NLPP calculates three price benchmarks from your data and shows which products are
more expensive (above benchmark line) or cheaper (below benchmark line) than the benchmark.
Worst-Practice
25% more expensive / 75% cheaper
Target
50% more expensive / 50% cheaper
Best-Practice
75% more expensive / 25% cheaper
25%
75%
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12. Regression methods provide reliable results only if their mathematical pre-conditions are fulfilled and
the method correctly capture the structure of the input data.
Only models that capture
the structure of the input
data and extract as much
information as possible
give reliable and usable
results.
It is easy to calculate many different regression models which do not capture the
structure of the input data, but still calculate an (unreliable and incorrect) result for
each part number.
Only correct "performance pricing models" can represent the product preferences
(defined by the selection of the performance drivers) and the market situation (part
numbers with parameters, quantity and price).
The methods used must extract the maximum amount of information from the
input data (gain of knowledge) in order to calculate a result model with the best
possible predicting power.
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3
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13. Depending on your input data NLPP automatically selects the regression method & price drivers that
gain most information from your input data for the best possible price predicting model.
High
Low High
Robustness
Accuracy
LPP-QR
LPP-LSM
NLPP-QR
NLPP-LSM
High data requirements & conditions
Outliers have big negative impact on result
Negative target prices possible
No math requirements on input data
Outliers don’t impact the results negatively
Negative target prices possible
No math requirements on input data
Outliers don’t impact the results negatively
Always positive target prices
High data requirements & conditions
Outliers have big impact on result
Always positive target prices
LPP-CR NLPP-CR
linear non-linear
No math requirements on input data
Outliers are handled
Negative target prices much less likely
No math requirements on input data
Outliers are handled
Always positive target prices
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14. NLPP’s unique & advanced calculation methods are necessary in 96% of all real life cases to get the
best analysis results. The simple & common LPP-LSM approach only applies to 4% of all cases.
4%
6%
21%
14%37%
18%
Distribution of “Best Method”
LPP-LSM LPP-QR LPP-CR
NLPP-LSM NLPP-QR NLPP-CR
Base: 107 data sets from different
industries for different part groups
NLPP-QR method (37%) has more share
than all LPP methods (31%) together
In the LPP cases, LPP-CR has a
significant higher share then any other
LPP method
The “normal” LPP-LSM method is only
the best method in 4% of all cases, in
96% of all cases, one of NLPP’s unique
advanced calculation methods gives a
better predicting model
Notes
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15. A statement like "LPP-LSM may not give a perfect result, but still good enough" leads to the use of
unrealistic results and puts operational purchasing at a high risk.
Unrealistic models
calculate random target
prices and therefore also
random potentials
savings.
96% chance that LPP-LSM models are unrealistic.
An LPP-LSM would be significantly more unrealistic (≧ 20,000 times)
in almost all cases than the best NLPP model.
Results calculated with unrealistic models have random characteristics
and weigh the user in false security.
An unrealistic model uses only a fraction of the information contained
in the input data.
Good Input ⇾ Bad Output
„If all you have is a hammer, everything looks like a nail“
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16. To find potential savings and to calculate price predictions NLPP offers many advantages compared
with other methods.
NLPP
Cost analysis /
Cost structure analysis
Focus
Focuses at the price
in proportion to customer value
Tries to understand
the costs of the supplier
Data
Uses the data treasure of
many different parts
Concentrates upon few part numbers
Time
Results for thousands of part numbers
are quickly available and useable
Approach doesn’t scale for
many part numbers
Information
Uses clearly defined & measureable
properties of parts that don’t lead to any
discussions with suppliers
Makes assumptions of parameters that
mostly lead to discussions
with suppliers
Robustness
Gives stable and robust results with
already few and not perfect data
The value of one parameter can strongly
influence the calculated costs / prices
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17. The NLPP workflow consists of a few simple steps. As result NLPP presents new evidence from your
pricing and product information.
Use NLPP's analysis
functions to drill down
into your data and see
what you've been
missing.
Use the result to
develop and
effectively
implement your
purchasing strategy,
negotiation tactics
etc.
NLPP calculates the
best formula in a
couple of seconds and
uses it to calculate
target prices for all
records
Import your data into
NLPP and define the
price drivers NLPP
should use for
calculation
Compile the
properties of your
products which
you expect to
influence the price
in an XLS sheet.
51 2 3 4
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18. With the Saphirion “Data extraction service”, we take care about the first step, so that your data
quickly becomes an immediately usable NLPP model.
Rea
dy to use NLPP m
o
del
D
ifferent Datasource
s
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19. NLPP application overview / data handling
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Records
Cluster
Workflow

20. NLPP application overview / result analysis
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Benchmark Potentials
Detailed Results
Interactive Graph

21. Your NLPP license consists of software, training and documentation. On top it covers unlimited
personal access to our team of experts.
Personal access to our
NLPP expert team
Software
Training
Documentation
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22. NLPP’s power is best experienced in a real life environment where it can show and deliver its true value
in a very short timeframe.
NLPP
Life Presentation
Free NLPP
Demo Analysis
NLPP
Pilot-Analysis
Remote / On Site
Duration 1h – 3h depending on
audience size
You collect 15 – 20 records of any
part group you are interested in
We do a life NLPP analysis of
your data
We interpret the results
You get the results either as XLS
export or together with a special
NLPP version, enabling you to work
with the analyzed data set
Remote / On Site
Duration 1h
We show you the NLPP
workflow, from data import
to result
We answer all your
questions
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NLPP
Pilot-Phase
NLPP
Roll-Out

23. Saphirion AG
An der Lorze 9
CH - 6300 Zug
info@saphirion.com
T: +41 41 55 20 21 1
F: +41 41 55 20 21 2
http://www.saphirion.com
http://www.nlpp.ch
Saphirion, the Saphirion logo and NLPP are registered trademarks.