pVelocity customers apply rigorous profitability analysis to product-mix and customer-mix decision making.
Overview
With complete profit visibility, pVelocity users can explore options on how to improve profitability by analyzing the specific drivers of profit at a level in which actionable outcomes can be determined, such as the product, customer, equipment, or sales rep. The pVelocity analysis solution is extendable and adaptable to the unique business models that are faced by manufacturers. The solution allows users to execute multivariate "what-if" analyses on different drivers of profitability. These can include:
- Hidden capacity opportunities
- Manufacturing processes or recipes
- Markups
- Variable costs
- Asset utilization
- Raw material costs
- Utility costs
- Labor costs
- Packaging costs
- Freight costs
- Fixed costs
- Depreciation
- Sales General & Administration (SG&A)
When the above analysis is performed in the customer or product context, specific scenarios can result in achievable targets with realistic objectives. These objectives are realized through action plans involving the adjustment of one or more drivers through a change that can be executed with the associated product or customer.
For example, executives and managers can change the cost of a given raw material and see a forecasted profit impact when pVelocity updates the costs of all products using the same raw material. Alternatively, a product with an unprofitable manufacturing process can be made more profitable by increasing the effectiveness of the assets employed, perhaps through a larger batch size. Existing capacity deployed with unprofitable product can be refocused onto other more profitable products with demand.
Business benefits
- Improved decision making effectiveness driven by multivariate what-if analysis. Effective decision making relies on the input of accurate information, and the ability to create models to forecast the result of various courses of action.
- Improved asset utilization from more timely insight into customer demand trends. By increasing the timeliness and accuracy of visibility into shifts in demand, pVelocity enables marked improvements in asset and inventory performance.
- Increased profitability and customer satisfaction from closer relationship between customer needs and product mix. pVelocity understands that a significant element in maintaining customer satisfaction - which correlates directly to profitability - is ensuring that your product mix reflects the continually shifting needs of your customer base.
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