Not long ago, we were called by an executive team who had recently taken over a profitable eight figure business. Though they had ambitious growth plans, it seems that they were unable to find a way to profitably grow the business. The firm was profitable, had good products and solid distribution partners. The executive team was not lacking in skill or knowledge. Yet something was making in impossible for the business to grow.
It turns out that the barrier wasn’t something in the way but something (two things, actually) that were missing.
The Missing Ingredients
You see, though the overall business was profitable, it was impossible to tell which products were strong contributors to the bottom line and which ones weren’t. Investing in growing the wrong products could be disastrous so it was impossible to invest confidently in anything.
The two things that were missing were visibility of product cost data and the ability to optimally plan production. Fortunately the solution to this problem is well known. I fact it is one we have implemented for business after business.
A Simple Solution
An Enterprise Resource Planning (ERP) system tracks cost at a detailed level. It tracks inventory and the cost to build it. It turns a demand forecast into optimized production and procurement plans. With detailed cost data, the profitability of each product line can be determined along with what investments would be required to grow the profitable ones. With an ERP system, this business would be able to invest with confidence.
If your business is hitting a wall (or a ceiling) let us help you determine whether the right system can be the solution. Call me at 845 371 1975.
