29.06.2020

The Importance of Gross Margin Analysis

 Show Interest

The Importance of Gross Margin Analysis

 Show Interest

The delivery driver arrived with a quantity of specialised bolts.

The receiving company had no workable goods inward system.
The driver walks around the benches of the workers and eventually someone squiggles something illegible on a delivery note and promptly puts the box of specialised bolts under his bench and gets on with his work.

A few days later, 4 workers spend 3 hours looking for the specialised bolts - they cannot be found.
A new set of specialised bolts are ordered and arrive 2 days later. The order is completed and despatched but is now days late. It is part of a refurbishment program for a set of shops.

12 hours of lost labour time later at a cost of £240 plus catch up overtime  and the duplicated cost of a replacement set of bolts at another cost £125 which is  never recovered,  oh a month later the specialised box of bolts was found but as its I was for a one off order and they sit in stock and will never be used again. The margin on the sale had deteriorated but nobody noticed.    

This of course is not fiction but a typical day in the life of a company manufacturing high quality products not managing its P&L properly no focus on margin analysis and failing with its systems. It is of course no surprise the Company was unable to survive the recession, 60 people made redundant the supply chain suffers losses.

All this could have been avoided and a great manufacturing company could have been saved if only some simple analysis had been undertaken.   

ian@corporatess.co.uk

  • Funding
  • Manufacturing
  • Business Improvement
  • Cash flow modelling
  • Survive and thrive

During the last 30 years I have been providing transformational change and supporting growth plans for a range of businesses from SME's through to PLC's.

Property

Property Investment - A Smart Choice in the Post COVID 19...

Property investment in general is looking like a good bet right now, notwithstanding the market adjustment that is…
Property

Why is your money in the bank?

The four main reasons why your money needs to be invested in property; If you put 50k in the bank in 10 years it is…
Business Management

Sales Training Courses - The Sales Fix Formula

Sales Training by Kieran Perry Business Advisor & Sales Expert.       www.kieranperry.com             "The Sales Fix…

More Articles

Business Management

How Can Your Coaching and Consulting Business Benefit...

If you are a coach or consultant, chances are that your greatest challenge is attracting committed, high value clients.…
Business Management

Dear Client, It's Time to Break Up....

No matter how much you try to please some customers, at the end of the day, they might leave you. Don't take this…
Business Management

What is Virtual Mentoring and Online Coaching

What is Virtual mentoringBy Kieran PerryVirtual mentoring is when a designated mentor and his mentee communicate from a…

Would you like to promote an article ?

Post articles and opinions on Cheshire Professionals to attract new clients and referrals. Feature in newsletters.
Join for free today and upload your articles for new contacts to read and enquire further.

Find the right professionals in Cheshire

View The Full Index

Search By:

Submit your Enquiry here

Enquiry Details

Contact Details