Chemicals: Clear Formula for Success
Burk's Portfolio Management Solutions gave clarity to this large-scale chemicals company by identifying opportunities equivalent to 40x project investment, leading to a doubling of pocket margins.
How can you achieve transparency in a truly mega-scale organization? This was the question posed by the chemicals business unit at one of the world's leading oil players. With $30bn in sales and 2,000 products that were the responsibility of 1,300 sales people, the chemicals business was nonetheless being held back by two issues. A squeeze between the market and production kept margins thin. And a lack of transparency in this huge, complex organization inevitably led to management issues that weakened margins as well. Burk's Portfolio Management Solutions for B2B paves the way for higher margins for large-scale chemical business unit .
Clear Route to Transparency
Burk's Portfolio Management Solutions offered the company a way forward, because it held out the possibility of a thorough, dynamic analysis of all the factors impacting the cost effectiveness of marketing and production enterprises at the chemicals unit. A comprehensive performance management platform built to capture the best of Burk's commercial analytics, the Solution could deliver precisely the kind of business intelligence the chemicals business was looking for in their drive to improve margins. And it showed a clear route to the transparency that the business needed. It also suited the CEO's preference for a structured, quantitative approach.
Achieving the company's ambition required a large-scale, enterprise-level response. So this was how we approached the challenge - following up an intensive pilot test-drive with a six-month rollout plan.
Double Pocket Margins
From implementation start, we began to uncover significant potential. During the pilot alone, we identified opportunities equivalent to 40x project investment. The waterfall we designed to reflect the business' true underlying economics revealed a number of surprises around hidden costs. And our work to decompose and accurately allocate costs for complex transportation systems showed the way to almost double pocket margin. It has also made for more accurate sales incentives: these can now be based on actual profit, rather than the artificial gross margin numbers used in the past.
Burk's Portfolio Management Solutions is all about sustained impact. So during implementation, we designed commercial and operational processes to embed the Solution in the business unit's daily workflows. We built the company's capability, training 350 users and 40 master users. Today, the chemicals business has a system at the scale they need. Burk's Portfolio Management Solutions covers 70 cost categories, 60 business dimensions, and 50 data sheets and uploads data on actions, margins, revenues, costs, and profits. The software is a fully translated local language version - which is particularly important for transparency - and includes new functionality and customized analyses. Most importantly, it has become core to business intelligence at the chemicals BU.
Burk's Portfolio Management Solutions provides the critical transparency that will help the company consistently find new opportunities to manage margins in their daily operations.