Our Strategic Review of the business involved a review of all historical financial data, including customer invoicing, job costings and staff timesheets to identify the best and worst performing areas of the business.

Initial analysis showed that client’s inventory had blown out and that they were holding 7 months of stock. Once we realised how over-stocked they were, we changed the purchasing policy away from bulk buys, as their profit was tied up in the last 50% of the stock that wasn’t selling through.

We were able to identify an organisational ‘hourly rate’ by listing all of the client’s accounts and dividing this number by the number of hours in the total revenue of each account. The client was surprised to discover that the mid-sized accounts were highly profitable, while the large accounts were just breaking-even (due to write-downs, mis-quotes and unfavourable trading terms).

Using our analytics software we established that the client had an issue with wastage and that urgent jobs were causing time blow-outs on their routine jobs. Over the course of a month, we recorded the labour and materials required to complete every job. We then ranked each job based on profit contribution, which allowed us to look at ‘cumulative frequency and identify that 15 of the 50 jobs completed in that month provided 80% of the profit and used 50% of our labour. This insight allowed us to identify what types of jobs the client wanted more of and which ones were burning labour and materials, relative to their profit contribution.