Breeden Security (B)

1209 Words Mar 20th, 2013 5 Pages
Breeden Security, Inc.

RECOMMENDATIONS

Reduce Order Driven Costs & Improve Customer Profitability - Immediate

• Standardize RC2 packaging to reduce costs

• Incent customers to place larger orders less frequently by instituting minimum order limits

• Impose a premium fee for rush orders

• Coordinate with customers to improve forecasting and further integrate supply chains for more accurate and timely ordering

Update Product Marketing Concept & Refine Corporate Strategy - Long Term

• Perform a market/competitive analysis of the US market to inform future decisions

• Improve accuracy of forecasting

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• An in-efficiency exists in the packaging & shipping of The Company’s RC2 product and this challenge must be addressed in order to improve the profitability of the RC2 product.

First and foremost, JKS Consulting proposes immediate action by The Company to standardize packaging across customers, to drive down the overall cost of order fulfillment for the RC2 line.

CUSTOMER PROFITABILITY

The breakout of order-driven cost calculations performed by Controller Baer provided JKS Consulting tremendous context with which to support the hypothesis that fulfilling orders was a significant cost. The following chart offers insight into the recommendation that Breeden Security revise the shipping policies of both products, specifically the RC2 product:

This data supports the assumption that a significant amount of resources are consumed filling orders for the RC2 product, regardless of the unit size per order.

• In 2008 the RC2 product received 400 separate orders from a total of 18 customers.

• The average order size was only 200 units.

This information provides further evidence for our conclusion that the number of orders is a major cost driver resulting in decreased profit margins for The Company’s RC2 product. In order to
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