In spite of achieving increased volumes and perceiving themselves to have a successful business strategy, our client still experienced declining margins
Unclear about what was causing these declining margins, the strategy had been focused on growth, in particular for the most promising industry segments. Despite analysing the situation from various perspectives, the management team still couldn’t pinpoint the real issues and define a cross-functional action plan.
We connected multiple (8) data sources and combined their information through big data tooling (ETL) to generate recurring data sets. These produced insights at article level by comparing actual costs against various standard costs/margins. Having never been done before, this provided unique and unexpected insights into margin drivers via both pricing and costs. Data validation was an essential part of the approach.
The shared insights into price & cost drivers led to creation of an action plan which has been adopted by the management team.