29.06.2020
The Importance of Gross Margin Analysis
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.
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.
Employment & HR
You need to take URGENT action. NOW. This Bill terrifies...
You need to take URGENT action. NOW. This Bill terrifies leaders - here's why.You’ve heard the headlines;↳ NDAs will…
Financial Services
Dealer Opportunity
🚗 Dealerships, Let’s Talk Leads – For FREE!
We’re growing fast on the direct-to-consumer side of vehicle finance,…
More Articles
Training and Development
Assessors and Internal Verifiers: The Backbone of...
When we talk about vocational education, whether it’s construction, hospitality, business admin, or health and social…
Employment & HR
Are women reinforcing the very gender biases we’re...
Are women reinforcing the very gender biases we’re fighting against?I watched a video this week where a woman states…
Accountancy
HMRC Enquiry meetings: What customers/clients/taxpayers...
IntroductionAs a former seasoned HMRC Tax Investigator, I’m sharing this insight into an important interaction with…
Would you like to promote an article ?
Post articles and opinions on Professionals UK
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.