Analysis tool for contribution margin evaluation
Problem definition:
Contribution margins are available in the product cost calculation for each item and vary greatly from item to item. With a very extensive range of articles, which has become more and more extensive over the years, it is sometimes necessary to revise this and remove unprofitable articles from the portfolio. This is all the more necessary if the functions of these uneconomical items can now be taken over by other, more profitable products.
However, these products are incorporated into machines and systems, some of which are certified and extensively documented. Therefore, not every customer is willing to replace the old items with new ones and possibly carry out new approval procedures.
Situation before:
No alternative solution available.
Situation afterwards:
This tool was created years ago at the suggestion of a colleague-controller. It could be filtered according to sales, turnover, contribution margin areas, product categories, years and the maximum number of customers who bought an item in a year. The selected article was then transferred to another view and the customers who bought it were listed with their data. Once an article-customer constellation had been identified in this way, a customer number could be selected there again, for which the remaining purchased articles were then listed in a further view.
At each of these levels (article, customer, article & customer), comments or ToDos could be documented with the potential savings to be achieved.
The potential savings identified in this way could then have been assigned to people who would have clarified these aspects with the customers and thus facilitated the discontinuation of uneconomical products.
Select products according to product-line, range of turnover, margin and sales quantity and some other parameters
Click in line selects article, moves it into the center view and shows the customers who have bought this item
Select one of the customers to show this customer´s sales in the last years.
In the top element info can be documented for the article, the customer or the combination of both This could be transformed into a Todo-list with the potential savings