-- 92% of respondents felt that the ability to analyze the speed with
which the organization produces the most profitable products or serves
profitable customers and markets was very to somewhat important.
-- 71% do not have software or systems in place to analyze combined
margin and production run-rate data.
-- Only 5.7% of respondents use profit per minute to measure
profitability.
Although respondents overwhelmingly (92%) believe that analyzing the speed
with which they produced profitable products was important, 71% don't have
software or systems in place to do so. The result is that very few
manufacturers (5.7%) have the ability to use a metric that is aligned with
ROA.
According to Michael Rothschild, Founder and CEO of Maxager, "The findings
don't surprise me. Many of our customers realize the importance of
incorporating the speed at which products are made along with margin in
order to evaluate profitability. But they just haven't had the ability to
be able to do this."
The survey also showed:
-- Sales and marketing groups use revenues and sales as their primary
metric (81% had it as their first choice).
-- Production teams most often focus on costs (78%) with production speed
(67%) second.
-- Finance departments use both costs (86%) and margin-based profits
(86%) as their primary metrics.
"The unavailability of a time-based operational metric that takes
production run times into account has forced companies to use different
metrics in each department, none of which are directly linked to return on
assets (ROA), the profitability metric of most importance to shareholders,"
said Rothschild. "In our experience, this results in lost profits worth
3-5% of revenue, not to mention numerous heated debates that result from
the lack of a common metric."
Combining production velocity with margin produces a profit-per-minute
metric. Being time-based, this metric is directly linked to ROA. It can be
used at an operational level to measure the profitability of individual
products, customers, deals, markets, sales regions, salespeople and
production facilities. Then, everyday decisions about which products to
make, who to sell them to and where to make them can be made
collaboratively to maximize annual corporate profits and ROA.
About Maxager Technology
Founded in 1996, Maxager's patented enterprise profit optimization (EPO)
solutions help leading chemicals, metals, electronics
and other complex manufacturers such as Dow Chemical Company,
Owens-Illinois, Siliconware Precision Industries and WCI Steel increase
cash and profit worth 3-5% of revenue. Uncovering profit gain
opportunities that are obscured by traditional "margin only" analysis,
Maxager uses both margin and production velocity information to analyze
history and generate realistic forward modeling that provides management
teams an entirely new level of control over Return on Assets
(ROA) -- the key driver of shareholder value.
Ideal for manufacturers with a wide range of products, customers and
assets, Maxager's unique technology calculates precisely how fast each
product, customer, or market generates cash and profit from the assets,
allowing managers to truly optimize product mix & customer
mix profitability, sales & profit planning, strategic
pricing, and production
planning. New customers typically begin reaping benefits within 60
days. Maxager is headquartered near San Francisco with offices in Europe
and Asia. For more information, visit www.maxager.com or call
+1.888.MAXAGER.
©2007 Maxager Technology. All rights reserved. Maxager is a registered
trademark of Maxager Technology, Inc. All other trademarks are the sole
property of their respective owners.
Contact Information: Media Contact: Juliet Travis (510) 452-3771 Email Contact