Project Milwaukee

Client Situation

The objective was to establish transparent reporting to drive executive decision making by country, channel, customer and product.

This required allocation of manufacturing costs to individual products, rather than transferring pricing-based costing.

The client wanted to identify loss-making countries, customers and products at different levels (e.g. gross margin, EBITDA margin, etc.) to derive actionable insights.

Approach

PwC built visualisations highlighting gross margin by geography, channel and product. This provided management with the insight to make key strategic pricing and investment decisions.

We were able to calculate standard costs for existing products, free from artificial internal transfer pricing policies. This gave management visibility into the actual product gross margin.

Detailed allocation of local SG&A functions, including both customer facing (sales/marketing) and non-customer-facing functions (warehousing/logistics), provided transparency over local product gross margin.

PwC identified key variations in sales / marketing / customer service support for different customers, driving customer retention and underlying value.