Profitability Analysis

$500M Food Distributor

Background

  • The company is a broadline foodservice distributor
  • They offer equipment installation, service, and preventative maintenance as a service offering to customers that purchase their chemical and beverage (chem/bev) products
  • The expenses to provide these services are to be recuperated through pricing adjustments on products that are dispensed through the equipment being serviced such as dishwashers, coffee and tea brewers

Contributions

  • Provided a detailed value-stream map of process to support chem/bev services new and existing customers
  • Identified all costs to provide equipment services to qualified customers and quantified the revenue
  • Created a monthly P&L statement outlining the year-to-date financial performance of the chem/bev service organization and provided end of year forecast
  • Recommended modifications to Go-To-Market strategy for future service offerings to increase profitability

Results

  • Increased forecasted revenue by $100K by adjusting prices on dispensed chemicals and beverage products to align with service organization cost structure
  • Identified $12K cost reduction through increased service technician utilization
  • Increased margin on leased equipment by 10%
  • Implemented process control to ensure all Equipment Sales and Installation projects yield 24% margin