Client Examples

 

Profitability assessment and portfolio optimization for a multibillion manufacturing co.

Insight & Impact

The complexity-costing analysis revealed that in the US division, 18% of products generated 100% in operating profit and the remaining 82% of products destroying 99% of that profit

In addition, the three work streams identified opportunities for the business in SKU reduction, raw material consolidation, operational efficiencies, and a more targeted market focus.  Identified opportunities represented a gross profit increase of 16%.

WWCC Case1

Key insight from the study:

  • TapeCo was unaware that many segments, traditionally considered key focus areas, were actually unprofitable after adjusting for complexity
  • With a clearer view of segment profitability, TapeCo could refocus its sales force and properly align R&D initiatives
  • Using substitutability as a lever, TapeCo was able to reduce a key raw material by 44%, lowering inventory and change-over costs
  • WP&C built a tailored operational model to help TapeCo manage the trade-offs between inventory, scrap, labor costs and desired service levels

 

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