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Cost Analysis & Restructuring
In today’s highly competitive and volatile global marketplace, business leaders need rich and relevant information on the true profitability of the products and services they offer to customers. Yet for many, the apparently simple task of measuring profitability of offerings is buried in a morass of confusing and often arbitrary cost allocations. Cost analysis & restructuring is key to the true profitability of companies, especially for each product. DKC global trade consulting can help to adopt a structured, methodical approach to calculating profitability by cost restructuring and cost rationalization
How to analyze
To enhance reliability of internal data for the purpose of profitability solution, there must be complete alignment with the profit and loss (P&L) statement in terms of total net profit. This means that the net profitability on all elements (products, customers) in the structure must sum up to the reported profit. Therefore, the solution includes analysis of all profit factors general ledger, cost center, cost drivers, products, customers (sales channels). After optimizing the cost incurred, all factors will be realigned for the calculation and analysis of cost and profitability.
The cost and profitability analytics methodology and solution
DKC global trade consulting can help companies define profitability at the product, service and customer levels. Furthermore, the consumption of business processes and resources will be transparent to decision makers. These cost and profitability analytics capabilities can give business leaders what they need to make effective decisions. Timely and granular data about their net margins will help them tailor offerings and set competitive prices for the customers.
By using this methodology, companies may better understand their cost structure and root cause drivers—allowing them to distinguish among product, service and customer costs. These insights into cost interactions can make it possible to create the full cost structure of the business. With this timely knowledge and ability, companies can be better positioned to understand the profitability of their business model and take the steps necessary to manage and sustain their growth agenda.is