Profit & Cash Flow Improvement

Profit & Cash Flow Improvement

Companies in every industry and of every size strive to increase profits and improve cash flow. Many of our clients separate teams due to the complexity involved in profitability maximization, with individual groups leading material cost reduction activities and revenue growth strategies independently. However, profit optimization requires a thorough analytical evaluation of the product portfolio to ensure the balancing of both cost and pricing metrics to identify opportunities to improve profitability and cash flow. Without a holistic, analytical view, each team may be making sub-optimal decisions on any number of issues (e.g., sourcing, pricing, quality, technology) that may result in reduced profitability for the organization. This often leads to aggressive incremental cost reduction focus for organizations who have been working on continuous improvement initiatives for decades, rather than a push for both maximization of cost reduction and optimal market-based product portfolio pricing.

At Ricardo Strategic Consulting (RSC), our experienced consultants lead cross-functional client teams to develop holistic plans for optimizing profit potential, impacting revenue in the hundreds of millions of dollars range. RSC assists clients with our proven analytical methods to quickly free up cashflow to enable significant investment in growth areas (e.g., mobility technologies and services) over the short term. By leveraging our extensive technical and commercial backgrounds, we lead cross-functional teams with a variety of cash flow improvement initiatives, including revenue increase strategies, cost reduction studies, and development of business cases using a data-driven approach. This has included in-depth examinations of profitability at the commodity, aggregate, and part number levels and across many cost-drivers, including logistics, packaging, quality, technology, warranty, and storage. Our clients value RSC’s ability to identify, coordinate, and implement complex and cross-functional opportunities to improve cashflow within their organizations using our collaborative on-site approach.

Some examples of profit and cash flow management assistance RSC can provide companies include:

  • Building and leading cross-functional client ‘task-force’ teams, optimizing profit-minded business decisions by fostering cooperation and communication between Purchasing, Marketing, Finance, Supply Chain, and Engineering teams
  • Assessing cost and revenue drivers from manufacturing cost, logistics, warehousing, warranty, packaging, design-for engineering and manufacturability, quality, competitive benchmarking, distribution strategy, etc.
  • Identifying cost reduction opportunities through design and/or operational optimization
  • Creating and analysing profit before tax (PBT) product breakdowns
  • Devising methodologies to enhance pricing strategy to extract increased margin relative to competition
  • Optimising of sourcing volumes to maximize profit based on manufacturing capacity, competitive positioning, economies of scale, and price elasticity