Identifying the cost of the product and the correct pricing
Client
Cidérka - Beverage production focused on premium customer segmentCidérka - passionate producers of cider and must, using traditional methods, without unnecessary chemicals and with respect for nature. In the beginning, their production was very small, so they didn't have to worry about spending too much time on something or having bottlenecks in production or logistics. However, with the coming success both in the local market and later in prestigious global competitions, there was a need to address this in order to be able to respond in a timely manner to growing volumes while maintaining top quality, and at the same time to be able to predict which products and customer segments needed to be prioritised with the right business parameters.
Baseline
- No production costing, only rough, best-guess estimates.
- Pricing not linked to real costs.
- No full P&L profitability view considering the volumes and portfolio weights.
Our solution
- Detailed analysis of purchasing and production processes with direct quantification in product manufacturing cost calculations.
- Expression of logistics and marketing costs by sales channel.
- Linking into a single model to express true product profitability.
- Creation of a simple planning model taking into account both total volumes and weights of product and customer portfolios together with pricing simulation with direct impact on P&L.
Summary
- Process mapping from production to the customer
- Modelling adequate tools for strategic decision making
- Project ~24 hours
Client words
"What started as a hobby quickly became a regular business with its own production, logistics, marketing and sales - a complex business, but a small one. But as volumes grew, we didn't have time to identify bottlenecks, inefficiencies or pricing errors, so it was hard to react to these things. Martin helped us with the production calculations by simply putting them into a simulation model and linking them to pricing. This allowed us to answer questions very quickly and to react flexibly by changing the composition of the portfolio or reconfiguring the pricing. It's great that Martin can work with small companies like us."Standardization of reporting with project management integration
External financial management and appropriate interpretation of business data
Forecast parameterisation and standardisation
Customer and product profitability identification and forecasting
Developing an eCommerce business case simulator
Identifying the cost of the product and the correct pricing
Identification of the profitability of products and distribution channels
Martin Klen Business consulting
Introduction
Offering 20+ years experience in various business analysis and financial management roles from big multinational companies and and mid-size local companies as well. Strong focus on business partnering and on implementation, standardization and centralization of (not only) finance processes according to the business needs.
Key competences
- Business processes analysis
- KPI identification
- Forecasts and financial projections modelling
- Reporting tools design and recommendations
- Business data interpretation
- Decision making support