Client Overview
- Company: Food Manufacturing Firm
- Industry: Industrial Components & Assembly
- Size: $5M annual revenue
- Location: Central United States
The Challenge
The client lacked visibility into customer-level profitability, assuming all revenue contributed equally to the bottom line. High-volume customers were consuming disproportionate resources, and custom products were priced without accounting for total fulfillment costs. No activity-based costing models were in place to highlight unprofitable segments.
Our Approach
Dan introduced a tailored Total Cost-to-Serve framework:
- Mapped end-to-end workflows by customer, product, and channel
- Applied activity-based costing across warehousing, shipping, setup, quality control, and account servicing
- Identified customers and SKUs with negative or marginal contribution margins
- Partnered with sales leadership to restructure customer tiers and recalibrate pricing strategy
The Results
- Identified millions of dollars in margin improvement opportunities through smarter segmentation
- Eliminated or re-priced unprofitable SKUs
- Aligned sales, operations, and finance teams around shared profitability metrics
- Equipped account managers with fact-based pricing narratives to support negotiations
Client Feedback
“Dan implemented a total cost-to-serve analysis in our operation, and the results were eye-opening. We discovered customers and items we had assumed were profitable but were, in fact, draining margin. With these insights, we realigned pricing and customer strategy, resulting in millions in bottom-line improvement.”
