Problem
A gasoline delivery / logistics company was unable to determine Gross Margin at a delivery level due to the high number of pickup and drop-off terminals, suppliers, various sources of and differing data quality on supplier invoices, multiple delivery scenarios – such as shared loads – and rapid movement in prices and product availability. The complexities of the logistics business and the data meant that there was no view of the actual profit (or loss) made on each deal until weeks after the fact. The company had tried to solve the problem 3 times with various consulting outfits and technological solutions and failed each time to gain the insights they required to manage their business successfully.
Solution
A data warehouse, a data matching engine and a data allocation engine that matched Purchase Orders and Sales Orders together in near real-time, and allocated revenue and costs, in order to generate profit at the customer / SKU / delivery level, so that each deal could be understood accurately, pricing and customer discounts managed accurately, and logistics improved. Accuracy levels went from the 70% range to 99%. The guesswork of supplier pricing and customer discounts – and therefore profitability – became a thing of the past. The business had visibility of profitable or unprofitable deals allowing them to manage pricing, delivery, and discounts to a much finer level and in a much more timely manner.