3 Ways to Leverage Analytics to Increase Margins
Even if we wanted to, we can’t get away from analytics, especially in retail.
With more and more customers showrooming and webrooming while online, social and content campaigns become increasingly sophisticated and data is driving more and more of what we do. But the big problem is what to do with all of this data?
What do you pay attention to? What do you ignore? What is signalling a trend you need to get ready for and what is really driving your success on a daily basis? To figure this out, the right enterprise resource planning (ERP) software is crucial. Here’s how it helps:
#1 Supply Chain Management
ERP cuts down on supply chain waste by tracking, in real time, what’s moving and what’s collecting dust. It also lets you know what will happen later by giving you a clear picture of what’s happening now. This way, you’re fully stocked when demand hits for certain products because you have a sharply defined focus of what moves and when it moves. With a few changes, based on what your ERP system shows you, you can improve your margins by 2% to 4% while fine-tuning your whole process to make it run smoother and more efficiently.
#2 Workforce Development
ERP analytics give you a drill-down into worker productivity to not only see which teams are delivering best, but also the kind of production schedules you need to ramp up while reducing wasted time. In addition, ERP software can highlight areas with long periods of downtime so you can adjust staffing accordingly and increase margins over the long-term – or simply reallocate those resources to areas where they can be better utilized.
#3 Price Point Analysis
Of course, on the tail end of every successful manufacturing, distribution, and retail operation needs to be an equally viable experience. The use of ERP dashboards to identify effective pricing models will keep your company from out-pricing your market while still maintaining the highest possible margins. Besides determining the best price points for your products, ERP-driven analysis of major sales and marketing events can also lead you to helpful information about promotions and other campaigns that have been successful in the past.
Overall, leveraging analytics to increase margins should be undertaken at all stages of your business model. Whether you are a distributor, manufacturer or a retail outlet, there is plenty to be gained by studying the individual components that make up your operation, identifying weak points, running simulations of possible solutions, and making incremental improvements that will impact the big picture.