Cut fulfilment cost, absorb
10% saving in Order Fulfilment; rates re-spread.
Capacity re-spread: department costs are fully absorbed by the remaining volume (TDABC activities still show unused capacity). Loss-making customers: 22 before, 22 after.
Baseline vs scenario
| Baseline | Scenario | Change | |
|---|---|---|---|
| Revenue | 20,185,090 | 20,185,090 | 0 |
| Direct margin | 6,661,978 | 6,661,978 | 0 |
| GL cost | 5,141,678 | 5,022,382 | -119,296 |
| Cost allocated to customers and products | 4,844,417 | 4,744,973 | -99,445 |
| Unused capacity | 297,260 | 277,409 | -19,851 |
| Operating profit | 1,520,300 | 1,639,596 | 119,296 |
Activities
| Activity | Rate (base) | Rate (scenario) | Volume (base) | Volume (scenario) | Unused (base) | Unused (scenario) |
|---|---|---|---|---|---|---|
| Custom finishing | 215.95 | 215.95 | 1,041 | 1,041 | 0 | 0 |
| Engineering changes | 1,472.54 | 1,472.54 | 229 | 229 | 0 | 0 |
| Hand assembly | 4.37 | 4.37 | 128,686 | 128,686 | 0 | 0 |
| Machine run | 18.62 | 18.62 | 47,923 | 47,923 | 0 | 0 |
| Quality inspection | 248.25 | 248.25 | 2,247 | 2,247 | 0 | 0 |
| Setups | 974.96 | 974.96 | 801 | 801 | 0 | 0 |
| Credit and collections | 13.56 | 12.65 | 4,480 | 4,480 | 28,577 | 26,669 |
| Customer support | 74.91 | 69.91 | 3,243 | 3,243 | 114,325 | 106,690 |
| Delivery | 114.04 | 106.42 | 4,386 | 4,386 | 0 | 0 |
| Order processing | 52.86 | 49.33 | 4,596 | 4,596 | 114,341 | 106,705 |
| Pallet handling | 23.96 | 22.36 | 14,910 | 14,910 | 0 | 0 |
| Returns handling | 301.52 | 281.38 | 282 | 282 | 40,017 | 37,345 |
Biggest customer profit movements
| Customer | Profit before | Profit after | Change |
|---|---|---|---|
| C006 Retail chain account 006 | 444,280 | 449,989 | 5,709 |
| C063 Online account 063 | 7,558 | 11,163 | 3,606 |
| C055 Online account 055 | -3,779 | -769 | 3,010 |
| C064 Online account 064 | 1,106 | 4,086 | 2,980 |
| C057 Online account 057 | -3,379 | -427 | 2,952 |
| C051 Online account 051 | 2,534 | 5,350 | 2,815 |
| C065 Online account 065 | -9,153 | -6,450 | 2,703 |
| C060 Online account 060 | -35,652 | -32,949 | 2,703 |
| C052 Online account 052 | -4,568 | -1,922 | 2,646 |
| C061 Online account 061 | -59,166 | -56,645 | 2,521 |
| C062 Online account 062 | -17,776 | -15,358 | 2,417 |
| C054 Online account 054 | -6,654 | -4,265 | 2,389 |
Whale curve: baseline
Whale curve: scenario
Scenario cost conservation: all checks evaluated.