Posts Tagged ‘Manufacturing Software’

One common, useful executive dashboard is a graph providing sales margin by product or product group. This dashboard allows the executive to see margin as a percent of sales for individual products or group of products in a visual manner. If a distribution company, for example, has dedicated significant sales and marketing efforts to a given product but that product has a significantly lower margin than another product, the organization can decide to direct more sales and marketing efforts to the product with a higher margin (this assumes that both products have relatively equal order volumes, as you would not necessarily want to dedicate significant sales and marketing efforts to a product with relatively low order volumes despite a high margin).

A second executive dashboard that is commonly used by manufacturing executives is one showing manufacturing output by product by facility. This dashboard allows manufacturing executives to analyze the facilities that have the highest production output for a given product compared to other facilities producing the same product (assuming equal resources are available across each facility). Comparing production output for a given product across multiple facilities allows the executive to gain insight into what facilities are operating more efficiently than others. This information can allow the executive to initiate potential business process improvements at the lower producing facility or reallocate resources across facilities in such a way that a given product is produced only at those facilities that produce the product with the most efficiency, leading to reduced costs and increased production output for all products and facilities.

A third executive dashboard that, while not used nearly as frequently as it should be, can lead to significant growth in profitability and customer service is a gross margin by customer dashboard. If I were to ask most manufacturers or distributors who their most valuable customer is, most would reply that the most valued customer is the customer who orders the most products with the highest frequency. While high order volume, high order frequency customers are certainly important, the executive should also carefully examine those customers who are providing the business with its largest sales margins. Focusing on the customers who are responsible for the organization’s largest sales margins is important because these customers deliver the most profitability at the least expense to the business. Ensuring that the products these customers order are always available in inventory and establishing these customers as “high priority” can lead to improved customer relations and increased profitability with minimal expense to the organization.

In sum, executives who leverage key business data dashboards are armed with the necessary information to make well-informed decisions for future business growth, output, and profitability.