Case Study: Cost to Serve
How Are You Using Cost-to-Serve Analysis to Drive Growth And Improve Your Bottom Line?
A building products manufacturer boosted their margin through implementing targeted pricing actions surfaced through cost-to-serve analysis.
The Challenge
A building products manufacturer had a highly complex pricing waterfall with many cost-to-serve elements. They recently underwent a price adjustment, but were not seeing results pull through to their margins. Additionally, the business had limit price measurement capabilities and was struggling to isolate what was causing the lack of impact to margin.
The Solution
We consolidated over 250 data files to build a bottom-up transactional cost-to-serve waterfall, which was utilized to identify price leaks and low-margin customers. Then, we implemented targeted price adjustments and redesigned programs and policies that were causing the most price leakage. This resulted in an 8% increase in revenue growth, increased compliance, and ongoing visibility to identify price leaks.
