Situation:
Forest Dental, a growing mid-market manufacturer, struggled to understand why profits and cash flows were not rising with sales. These issues were becoming more urgent with cyclical cash flow issues and planned price revisions.
Solution:
Implementing SMART Costing quickly revealed:
- The true cost and contribution of each product to the bottom line and cash flows;
- Some misconceptions about which products were driving profits and cash flows
Initial Outcomes:
Pricing Leverage Increases Sales, Margins and Cash Flows
- 30% sales increase from year to year in the first quarter
- Understanding of how the company makes money
- Pricing leverage
- Clearer sales strategy, liberating management time, and motivating salesforce
- Happy and motivated sales director driving further sales increases
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