Analyzing complexity-adjusted product profitability for a $10B consumer goods co.
AgriCo., a $10B diversified agricultural consumer goods company, had one division where the business was fragmented, with high complexity and product proliferation. The portfolio literally had tens of thousands of SKUs. The company did not know the cost of complexity and a true measure of product profitability. As a result, efforts to optimize the product portfolio were hampered and benefits from the previous efforts never realized.
Since time and resources were limited, AgriCo. sought an alternative to activity-based costing, which only provides static views of profitability and is difficult to perform for an organization with such a large product portfolio, manufactured in multiple locations. So AgriCo sought out help from WP&C.