Profit Velocity Solutions, a San Francisco-based software company, has pioneered an innovative platform for continuous profit improvement.
The PV Accelerator™ software enables high-product-variety manufacturers to increase profitability. It analyzes unit margin by production speed through key assets to measure Cash Contribution per Hour.
Profit Velocity Solutions works with private equity firms to help them improve the performance of their portfolio companies. PVS also partners with management consulting firms to provide an information solution that helps them improve the financial performance of their clients.
High-product-variety manufacturers in specialty chemicals, electronic components, packaging, industrial parts, and metals have achieved significant profit gains using PV Accelerator.
U.S. Steel Case Study
U.S. Steel Corporation
Largest integrated steel producer in North America
- $6 billion/year revenues
- 8 major markets
- 5,000+ products
- 5 manufacturing locations
- 37,000+ employees
The profit per minute information revealed by Profit Velocity’s Integrated Profit Planning and Control solution enabled U.S. Steel executives to make changes resulting in an increase of cash flow by millions of dollars, starting within three months of acting on the new insights provided by the PV Accelerator.
Before Profit Velocity
At U.S. Steel, managers were convinced that a better understanding of how they were selling “time on the mill” would give them better visibility into their business and enable them to accelerate cash flow and drive profits up.
Manufacturing companies have traditionally used dollars per unit, or “tons” in the case of U.S. Steel, as the key measure of profitability. But analysts at U.S. Steel knew that despite access to powerful financial and managerial databases used to support the company’s accounting, sales, and production efforts, the dimension of time or Profit Velocity was still missing from their metrics. The U.S. Steel team discovered that only Profit Velocity’s Integrated Profit Planning and Control solutions provided the missing components in their profit measurement system. So, U.S. Steel called on Profit Velocity Solutions to implement its information platform to work in conjunction with their existing management solutions.
Results
Decision-makers across U.S. Steel accessed Profit Velocity’s Integrated Profit Planning and Control solution to refine profit analysis, pricing, and product mix decisions. Millions of dollars in additional cash contribution were generated as a result.
Selling “Time”
Today, manufacturing firms recognize that what they really sell is time; time on the sophisticated production facilities their companies have invested many millions to build and will spend millions more each year to maintain and operate. In an economy where ferocious global competition is eroding margins, executives know they simply cannot afford to waste precious time and capacity on unprofitable products or lose profitable business when more slightly aggressive pricing would win the orders and still generate good profits. Executives and managers need access to information that will help them make the most profitable decisions on every order every day.
Regardless of the industry served, whether electronic components or industrial products (metals, plastics, textiles, packaging, specialty chemicals, etc.), time on key assets is the critical dimension governing profitability. We fully understand the value of your time. To help you achieve improved results as soon as possible, we offer accelerated implementation of our unique Integrated Profit Planning and Control solution. In collaboration with your preferred consulting partner, our PV Accelerator can be up and running within one month, so you can start generating payback in that same first quarter.
“We’ve known for a long time that what we really sell our customers is time on our mills. We also knew that if we could price and manage this time more effectively, we could offer customers more value and make more money at the same time.”
— Paul Kadlic, Executive Vice President,
Sheet Products, U.S. Steel
“Within the first quarter of deployment, Profit Velocity’s Integrated Profit Planning and Control solution was up and running. In the next quarter, sales representatives and production managers were being trained in its use.
The profit per minute information revealed by Profit Velocity’s solution enabled us to make changes that increased cash flow by millions of dollars.”
— Gretchen Haggerty
Senior Vice President & Treasurer, U.S. Steel
“Information from Profit Velocity has enabled our sales representatives to identify new product and pricing options so we can satisfy our customer needs, remain competitive, and drive higher cash contribution at the same time. Our strategy is to shift our product mix towards products with a higher Profit per Minute, so we can make significant improvements in cash flow and overall profitability.”
— Jim Kutka, Vice President,
Commercial Sheet Products, U.S. Steel