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National Janitorial and Cleaning Supplies Distributor
A national distributor of janitorial and cleaning supplies with twenty-five distribution centers needed to improve market channel and customer profitability while reducing operational costs across all locations. The company lacked visibility into their true cost drivers and profitability across channels, customers, products, and distribution centers, leading to potentially misguided business decisions.
I implemented an advanced cost analysis methodology: 1) Time-Driven ABC Implementation: Partnered with Acorn Systems to implement their Time-Driven Activity-Based Costing (TDABC) System, installed and configured the system, extracted SAP ERP transaction history, and developed ABC time-drivers using Little's Law. 2) Financial Data Analysis: Identified and categorized thousands of G/L accounts, segmented financial data into direct and indirect categories, and created profitability models. 3) Whale Curve Analysis: Conducted advanced analysis to identify profitability distribution across customers and channels, identifying top 20% generating 150-300% of profits and bottom 10% driving 50-200% of losses.
Cost Savings: Identified approximately $20 million in cost savings from unprofitable products and processes across specific distribution centers. Customer Retention: Reversed in-flight termination of a major customer by providing empirical evidence that they were among the top third most profitable accounts. Decision Making: Provided data-driven profitability insights to guide strategic business decisions. Resource Allocation: Enabled better allocation of resources to most profitable channels and customers. Operational Efficiency: Identified specific operational cost drivers for targeted improvement.
Acorn Systems' Time-Driven ABC (Activity-based Costing) System, SAP ERP data extraction and analysis, Little's Law for process time estimation, Whale Curve analysis methodology, G/L account categorization techniques, Profitability modeling, Cost driver analysis, Distribution center operations analysis
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