Achieving Landed Costs and Product Line Net Margin.
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Achieving Landed Costs and Product Line Net Margin
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Transcript of Achieving Landed Costs and Product Line Net Margin.
Achieving Landed Costsand Product Line Net Margin
Achieving Landed Costs
Challenges
Solution(s)
Benefits
Case study: Litehouse
the original cost of the item all brokerage and logistics feespromotional spendingcomplete shipping costs customs duties
tariffs and taxes insurancecurrency conversion crating costshandling feesAND overhead
Defining Landed Costs
Landed Cost is the total cost of a product once it has arrived at the buyer’s door. This list can include:
Not all of these components are present in every shipment, but might be considered part of the landed cost.
Charity HegelDirector of Finance
Derek ChristensenDirector of IT
Kim OlesenSenior Category Analyst
The players
Litehouse
Litehouse manufactures refrigerated produce dressings. They offer the best quality, value and freshness in dressings one can buy.
Litehouse is listed in the top 100 privately held companies in the U.S. by Entrepreneur magazine.
Runs an ERP called Ross Systems, and has well more than a dozen data sources in its data warehouse.
Using rebranded TARGIT Decision Suite as business intelligence solution.
Differing goals
Differing grain
Multiple data sources
Different timing
Tying out to the GL
Security concerns
Project cost benefit analysis
Challenges in Landed Costs
Differing goals
Differing grain
Multiple data sources
Different timing
Tying out to the GL
Security concerns
Project cost benefit analysis
Solution(s) – 1st example
Tying out to the GL
Actual Coupon Spend:
$121,423{ Spread to Location, Product Line
Ex. $12,142 to NW and Dressing
GL
Coupons
$125,000
$125,000 GL - $121,423 Actual $3,577
Spread $358 to NW and Dressing
1. What if we have spend but no Location?2. What if we have spend but no Product
Line?3. We can use history (as a guide) but what
if it is a new product?4. What if the president likes this method
but the VP of Sales doesn’t?5. What if the moon really is made of green
cheese?
Tying out to the GL – GOTCHAS!!
Differing goals
Differing grain
Multiple data sources
Different timing
Tying out to the GL
Security concerns
Project cost benefit analysis
Solution(s) – 2nd example
Added costs of donated and damaged material• Found granular data• No material benefit
Internal freight• Spread by weight?• Spread by value?• Changes SKU level GM
GL Tie Out• Finance = sales• BUT now wait to end of
month• Ultimate buy in
Project Cost Benefit Analysis
Up and to the right – how GM should go!!
Data, data everywhere
10 different
data sources
Categories and Detail
Differing goals
Differing grain
Multiple data sources
Different timing
Tying out to the GL
Security concerns
Project cost benefit analysis
Challenges in Landed Costs
Benefits
Margins increased on average 8-10%
Project has saved $50,000+ in the first six months in man hours alone
Waste and expired product dropped 6x
Strategic decisions at WARP speed
Profitability at customer, product line levels!
Founded in 2005 to supply companies with BI solutions rather than tools
Focus on Business to make a Business Intelligence Solution
Focus on best of breed solutions that fit customers
Company Overview
MRP Lite – Purchasing Horizon – Reorder Point Analysis
March 13th at 1:00 EST
www.businessimpactinc.comDan Cowan, [email protected]
Contact Information
