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GreyStuff was asked by a major investment fund to advise it on pricing its products and reducing its costs. The company had tried using spreadsheets but realised that the results they were getting were misleading; they had not thought through their true requirements and the spreadsheets contained errors.
Our approach was to interview senior management and key workers to establish their responsibilities and the activities undertaken by them and their teams. After a survey of the main activities in each department we recommended using activity-based costing and dedicated software. GreyStuff assisted the client in the selection of the software and building the models of each department.
We advised the company to build approximate models, which took a few weeks to complete, and not to try and model all activities down to the smallest detail. More accurate modelling was then focused on problem areas. The results of models enabled GreyStuff
- to show where resources were being wasted, used inefficiently and how major improvements in working practices could be made.
- to price products accurately.
The loss making products were either scrapped or had their prices increased and the overpriced products had their prices reduced and were made more competitive. GreyStuff was instrumental in increasing the company’s turnover through better pricing, increasing profit margins through greater efficiency and the elimination of loss making products.
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