Benefits

Benefits of True Profitability

How much value can a company gain by driving an improvement initiative? Our experience shows that 10%-15% EBIT improvement is achievable.

There are three different phases to generate value. Initially we use advanced data analytics and scenario modelling to identify and deliver rapid impact through tactical actions. These initial successes fund the following phases that generate deeper, more strategic improvements and transform profitability

Value Phase 1: Portfolio Rationalization

Typical Duration: 3-9 months

Margin Improvement: 3-5%

Value Phase 2: Value Chain Optimization

Typical Duration: 9-18 months

Margin Improvement: 3-5%

Value Phase 3: Business Model Transformation

Typical Duration: 18-36 months

Margin Improvement: 5-10%

Value Phase 1: Portfolio Rationalization

Three quick impact initiatives can drive 3-5% margin improvement in 3-9 months. The equivalent impact would typically require at least a 20-30% cutting of Opex costs. In addition, rationalizing the customer/product portfolio will also help optimize working capital and overall liquidity by ~10%.

Precision Pricing
Define differentiated pricing strategies based on customer and product value contribution

Product Line Simplification (PLS)
Simplify the existing product offering to drive focus and create a solid foundation for profitable growth

Customer Differentiation
Develop a customer differentiation strategy that aligns sales and service levels with value contribution segments

Value Phase 2: Value Chain Optimization

Three complexity reducing initiatives can drive another 3-5% improvement in 9-18 months. Reducing complexity is by definition complex. It requires data driven engagement to disentangle the operational bottlenecks and fragmented activities that drive inefficiencies and value destructive operations.

BOM Simplification
Identify and group components that are similar tied with a cost analysis to drive value improvements & simplification

Supply Chain Optimization (SCO)
Evaluate the full end-to-end supply chain for cost to serve improvement opportunities

Business Process Simplification (BPS)
Trace the operational process to diagnose optimization opportunities and reduce process costs

Value Phase 3: Business Model Transformation

Three strategic initiatives can deliver another 5-10% improvement over 18-36 months. Take strategic initiatives that fully align with simplification, growth and focused innovation, this to redesign the business model and engage in value creating transformations to reduce the costs base and differentiate the portfolio offering

Business Unit Segmentation / zero-up
Design for simplicity by using zero-based design to decrease discrete items and standardize for value within a business segment opportunity.

Systemic Innovation
Develop a culture of simplicity focused innovation, becoming both customer-centric and capable of solving problems by adapting existing solutions

Select bolt on acquisitions
Acquire discrete value enhancing businesses that support the business transformation model identified via the engagement in the value phases.

A Digital Approach

The digital approach that True Profitability brings enables you to achieve more by supporting the business to drive change and improvement, based on a solid and shared understanding of current and project performance

Alignment across functions
Rather than silo’d initiatives, this approach connects the dots

Digital twin modelling
help management understand scenarios and what ifs

Cloud based analytics engines
securely store the data, with monthly updates seamlessly feeding into updated models and insights

Action tracking
Used to link agreed actions with actual progress management of changes in business performance to drive ongoing results

Why Us

We wrote the book on True Profitability and have seen the benefits of adopting the approach first hand. Ordinarily a delivery such as this, undertaken by ‘traditional’ consultants would be expensive, time consuming and highly disruptive. True Profitability with AlignAlytics is none of those things as it leverages a rapidly deployable and easily sustainable technology platform with a clear value creation focus, in strong partnership with the business. We have conducted 30+ True Profitability engagement across the team across multiple sectors:

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Manufacturing

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Automotive

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Chemicals and advanced materials

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Construction

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Distribution

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SaaS solutions

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We wrote the book on True Profitability - here are some of the benefits we help clients deliver

Benefits of True Profitability

Value Phase 1: Portfolio Rationalization

Value Phase 2: Value Chain Optimization

Value Phase 3: Business Model Transformation

Value Phase 1: Portfolio Rationalization

Three quick impact initiatives can drive 3-5% margin improvement in 3-9 months. The equivalent impact would typically require at least a 20-30% cutting of Opex costs. In addition, rationalizing the customer/product portfolio will also help optimize working capital and overall liquidity by ~10%.

Value Phase 2: Value Chain Optimization

Three complexity reducing initiatives can drive another 3-5% improvement in 9-18 months. Reducing complexity is by definition complex. It requires data driven engagement to disentangle the operational bottlenecks and fragmented activities that drive inefficiencies and value destructive operations.

Value Phase 3: Business Model Transformation

A Digital Approach

The digital approach that True Profitability brings enables you to achieve more by supporting the business to drive change and improvement, based on a solid and shared understanding of current and project performance

Why Us

Interested in improving performance and profitability? Get in touch to find out more about True Profitability or book a free consultation.