Margin Enhancement
Strategic Sourcing. As the global economy recovers and companies rethink their manufacturing footprint, strategic sourcing will take on a markedly different tone. Gone are the days of simply consolidating and cherry-picking the lowest cost (and unfortunately often least capable) supplier. Going forward, companies must expand their universe of suppliers, understand suppliers real cost structure, evaluate their own total life cycle cost, and maximize their supplier investment as quickly as possible. Speed to value characterizes our approach to strategic sourcing. We help clients rapidly identify and select the right supply partners at the best all-in cost position.
Pricing Optimization. For many businesses, pricing changes can offer the single greatest lever to maximize profits rapidly. By understanding likely customer response to future price increases and decreases, through a granular understanding of historical demand elasticity and variable contribution margin, Summit's approach to pricing optimization delivers specific and actionable pricing recommendations on a product line by product line, or SKU by SKU basis. We believe in measuring outcomes and developing our clients' pricing functions for ongoing success.
SKU Rationalization. While new product development procedures are typically well-established, processes to phase out products are often fuzzy. Complexity driven by excessively broad product ranges manifests itself in customer confusion, excess or slow-moving inventory, manufacturing complexity, service complexity, as well as broken product lifecycle management. Our SKU rationalization methodology provides the fact base and analytical framework to drive consensus around difficult product rationalization decisions.
Customer Cost-to-Serve. All customers are not created equal. We know intuitively that certain customers drive significant additional costs beyond typical sales and service costs, and thus reduce profitability. However, most financial systems are not set up to capture such costs. Which customers and which channels drive 90% of your operating profits? Summit's approach tackles issues surrounding the allocation of operating expenses to individual customers and channels. This enables companies to focus sales and service efforts, including targeted product and pricing offerings, to specific customers to maximize margin contribution.
Transportation Optimization. Given the multitude of transportation options, understanding and selecting optimal carriers, modes, offerings, and trade-offs can be a daunting task for many shippers. We help clients to evaluate their needs and the marketplace through multiple approaches including strategic sourcing, network design, modal substitution, and pegging costs to market.
Packaging Cost Reduction. Our approach to reducing packaging costs utilizes a should-cost approach based on our team's deep industry expertise. This methodology allows clients to lower purchasing costs, reduce risk and gain a more transparent understanding of the drivers of packaging costs.