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FEATURED PROJECT
CEMENT |
The problem…..
There were 3
main
problems.
Profitability
was very low
and no-one
knew which
customers and
products were
profitable.
All the works
were operating
well below
maximum
capacity and
market share
was falling in
some areas.
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The project…
MBA examined the
true
profitability of
all products and
customers. We
created a model
of the business
containing all
the works, the
customers, the
silos, the
bagging plants,
the kilns, the
mills, and the
products. All
was in one
simple database
which was then
optimised to
maximise profit.
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The solution….
The kilns were
found to be the
key bottleneck
resource of the
company. They
are the greatest
expense and need
to be maximised.
All customers
and products
were ranked in
added value per
kiln hour. All
variable costs
were included…….
Raw materials,
energy,
transport etc.
10% of customers
were
unprofitable and
their prices
were increased
by an average of
25%. 3 of the 20
products were
hardly
profitable and
their prices
were increased
by 10% to 12%.
Most customers
were retained
Some products
were overpriced
and discounts
were offered to
new large
customers. Two
extra bagging
plants were
commissioned and
one works was
taken out of
commission for
two years.
Profitability
and market share
was increased.
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