The Challenge
Our client needed to grow—but in the right way. The company was growing in terms of volume, but not profits, and leadership wanted to build a more strategic growth plan on its significant invested capacity. To do this, they faced the challenge of simultaneously finding profitable deals, managing the potential risk of lower volumes, and providing quotes that took anticipated growth volumes into account. After several meetings with no breakthroughs, executives looked for outside help to manage this confusing dynamic through higher-powered analysis and sharpened sales focus.
The Solution
SCA Technologies™ used SCA Planner to conduct a business-process reengineering study to align marketing/sales, finance, and manufacturing for our Premium Pork Products Producer. The aim was to create a continuous process for planning/review, pricing, and projections. Leveraging the Analyzer™ and Maximizer™ modules, our client was able to estimate future costs using activity-based costing built on the latest available data for planned sales and operations; the projected costs, in turn, were used to set target prices to drive sales.
Through this process the company was able to build a comprehensive, forward-looking picture of its costs, margins, and profitable price quotes, reflecting its growth strategy. Further, the application enabled our client to produce quotes reflecting divergent customer agreements, pricing horizons, and product portfolios literally within minutes, rather than weeks. Over time, the application’s ability to drive customer agreement accounting allowed our client to support complex commercial requirements for several large customers simultaneously, minimizing risks of erroneous quotation and creating value for all parties.
The pricing process also highlighted areas where the company was not competitive, down to the operational benchmarks, enhancing their performance-planning and tracking. Through SCA Planner all of these activities could be performed in-line with current data (via ERP integration), allowing easy operationalization by the team and the development of a focused scorecard.
Results
SCA Planner helped our client realize smaller set up costs and the need for reduced inventory, lowering the unit cost of labor, depreciation, and other fixed costs an average of
3-5%. The software also allowed sales to optimize prices and volumes for multiple customers and items, increasing revenues. Overall, while our client’s revenue stayed
steady, profitability increased 30%. Their customers found the quotation process faster and more convenient, enjoying an enhanced view of current and future prices. The company’s collaboration with SCA also reduced the time devoted to meetings, data-related activity, and financial planning and analysis, reducing overhead by two FTEs.