How to handle increasing complexity

Challenge:   Customers select from over 1700 different cooked, ambient and chilled products each week (each customer has own recipe portfolio), manufactured with only a few hours of lead time, minimum order size = 1, zero shelf life.

CLIENT:  Airline meals provider

Client customers:  Major airlines

What:  Analysis of product portfolio and margin performance.

      • Complete review of operational performance versus standards
      • Identification of product specific improvement opportunity by value
      • Modelled 26 different portfolio scenarios both current and potential
      • Identified optimum portfolio scenarios for maximum profit
      • Implemented targeted operational improvements to focus on key products

Result:  A revision of the business customer portfolio based upon the optimised operation – which completely changed the view of which products made money and which did not, and which sales criteria it was right to support, and those which could be altered without risk.

Client quote:  “the Applied Acumen team did a fantastic job optimising our commercial activity to match a new level of operational capability”

AA response:  “We do what we say we’ll do.”

The benefits?

A step change in profitability

A simplification of the ‘make to order’ process

A confirmation that the ‘make to order’ process demanded by the customer should not be abandoned

An increase in capacity, and improvement in service level.

A confirmation that previous simplistic (ABC-based) pareto analysis of product margins had been incorrect.