I provide two distinct services for helping your company become more profitable:

1. Profitability and Cost Management Analysis using Time-Driven Activity-Based Costing
   Don't waste your money on Activity-based software.  It's expensive and complicated, and very difficult for your employees to manage and update.  I've developed a total solution that's more comprehensive than any commercial application, and I conduct all of the analysis for a fraction of the cost of all the major ABC software packages on the market today.  Furthermore, my solution is non-invasive requiring no hardware or software purchase or installation, nor employee training.
   
    

   A Turn-Key Profitability Solution Fixed Cost and Time-frame; No Software to Install; No Training or Education Required of Employees; Zero (0) Cost of Ownership (no licenses, platforms,  maintenance, etc.); Immediate results with short- and long-term actions  that can be executed to improve profitability; Magnitudes cheaper than commercial Activity-Based Costing software packages when you include the purchase, implementation, licensing, and maintenance of the software, consulting fees, and the training and learning-curve of internal employees (potentially saving several $100,000 dollars).

   
   
    

2. Pricing Strategy
   A key to profitability is proactively managing your pricing, commissions, and target margins.  See below to learn more about a framework that I've developed based on industry best practices.

Through Time-Driven Activity-Based Costing (ABC) you can better understand your profitability and have the factual data to make better decisions
	Free Telephone Consultation Contact me today to schedule an appointment (434) 825-5960

ACTIVITY-BASED COSTING

Below are two case studies of how I've helped my clients become more profitable using Activity-Based Costing:

Medical Supplies Distributor - Original Rate-Based ABC Methodology

Case
The business was profitable, but there were directives from the owner to grow and increase profits.  I was hired to develop a systematic way of measuring profitability by market, customer, sales representative, product, and supplier.  The managers needed this information to make informed strategic and tactical decisions

Solution
Over eight months, I designed and developed a Rate-based, Activity-based Costing system that extracted transactional data from the client's JD Edwards ERP software system.  The following were the results from the first calculations:

1. Determined that one of the most lucrative products sold by the sales teams was unprofitable after adding back in sales commissions;
2. Determined that many profitable products were not being sold to like customers;
3. Determined that the order-to-cash (OTC) core business process was not properly aligned with how product were sold to different markets and customer groups;
4. Identified unprofitable products that were being purchased and stored; thus consuming valuable warehouse space.

The final tally of potential savings equated to $5M over the course of five years for the $65M company.

Janitorial Supplies Distributor - Modern/Advanced Time-Driven ABC Methodology

Case
The business wanted to reduce warehousing costs, and determine which products were profitable from a market, customer, and supplier perspective.

Solution
Partnering with another firm, we implemented their time-drive, activity-based costing system.  The following were the results from the initial calculations:

1. The client was in the process of eliminating one of their channel partners; however, we determined that they were one of the top 10 most profitable customers;
2. We determined that one of the major suppliers was much less profitable than a competitor supplier.  The Vice President of Sales and Marketing was able to use the data to renegotiate lower prices with the supplier during a half-day meeting.  Before having the empirical data available, all previous discussions with the supplier were fruitless;
3. We determined that one of the customers that the client thought was most profitable was actually in the bottom 10 of most unprofitable.  We identified the specifics on the unprofitability, and devised a strategy for improving the customer's profitability.

The final tally of potential savings equated to $20M over the course of five years for the $300M company.

PRICING STRATEGY

Recently, I submitted a "Pricing Strategy" framework to a division of one of the largest companies in the World.  It was highly received by the CEO and CFO and a proposal has been submitted.  The following are some of the highlights of the framework that I developed:

The key concept in the pricing strategy is a framework that allows sales representatives to become more autonomous in their sales negotiations.  This is achieved by developing Sales Force Negotiation Fences based on target prices and margins.  See the overall framework below:

To enable the Pricing - Compensation - Negotiation Framework, there has to be a holistic change to cost management.  Typically, companies approach cost management from a waterfall perspective:

A better approach is to develop Target Prices, Margins, and Costs based on cost "build ups" as seen below:

The next step is to optimize price and volume to ensure profitability.  However, there are key influences that must be considered:

Once the target prices, margins, and costs are established based on key influences, then price / volume calculations must be developed for profitability optimization.  Like any business initiative, structural data and information is useless unless there is a strategic and tactical approach to execution.

To learn more, please contact me for a free, no-obligation telephone consultation.    Please see my contact information at the top of the page.