A guaranteed recipe for success - turnover up and costs down

The profit calculator reveals the difference between a break-even result and a win

We built a profit and loss calculator for a client in Excel via the income statement. While playing with the numbers, we once again noticed how subtle the difference is between two companies, one with a break-even result and the other with a profit. A little more sales and a little more costs and the business turns positive.

Turnover growth – more than just numbers

Turnover growth is the most visible measure of a company’s success. A growing turnover not only improves a company’s bottom line, but also allows it to invest in new technologies, staff training and expansion of production capacity. However, simply increasing turnover is not enough if costs are growing at the same rate or even faster. This is particularly important in the manufacturing sector, where quality control and production efficiency challenges can easily eat into the benefits of growth.

Configurators as enablers of profitable growth

This is where sales and production configurators come in. They not only support revenue growth by providing customers with better and more customised products, but also ensure that growth is profitable. Configurators enable more efficient production and quality management, which means a company can serve more customers and meet their diverse needs without uncontrolled cost or error growth. The production approach is not project-based but mass customised.

Automation brings precision and efficiency

One of the biggest benefits of configurators is the automation of production documentation when taking an order into production. Traditionally, moving an order from sales to production has been a multi-step, error-prone process that turns a few employees into variable costs. So the more orders, the more work. Order data is manually entered into multiple systems, which is not only slow but also error-prone. The Product Configurator automates this step, bringing significant benefits.

Firstly, automation speeds up the process. With all the necessary information about the product ordered by the customer directly under the control of the production configurator, production can start without delay. This means shorter delivery times, which improves competitiveness and customer satisfaction.

Secondly, automation ensures the accuracy of the information. The production configurator creates instructions from the order that are directly transferred to production, eliminating the need for manual data entry. This significantly reduces the possibility of errors such as incorrectly defined dimensions, materials or configurations. As the data that goes into production is always accurate, internal and external error costs are also significantly reduced.

Thirdly, the production configurator optimises the use of resources. It can automatically plan CNC programs and material usage according to the requirements of the order. Optimised cut-off lists for profiles can save tens of percent of expensive material. This makes production more efficient and minimises wasted resources, which translates directly into lower production costs.

In addition, the use of a production configurator enables better traceability and reporting. All production-related information is stored in the system, facilitating quality management and production optimisation in the future. This gives the company the tools for continuous improvement, which is essential to remain competitive.

Quality is the cornerstone of competitive advantage

Quality is one of the most important competitive advantages of a company, and its importance is particularly pronounced in the manufacturing industry. Quality costs – including defect costs and quality assurance – can make up a significant proportion of a company’s expenditure. Without efficient processes, these costs can amount to as much as 10-15% of turnover. Reducing internal defect costs, such as wastage and rework, is therefore a key objective when using sales and production configurators.

Similarly, external error costs, such as complaints, can eat into a company’s bottom line and reduce customer satisfaction. When a configurator ensures that the customer gets exactly the product he or she ordered, these costs are reduced.

When sales and production configurators are seamlessly integrated into a company’s processes, they not only reduce errors and costs, but also free up resources to exploit new opportunities. This allows a company to increase revenue and improve profitability at the same time – a recipe for success for any business.

Be brave and try

We encourage you to play with your own profit and loss account figures. Increase turnover by 10% while reducing fixed personnel costs, quality costs and material wastage by a few percent. We assure you that you will be positively surprised. Then you can start to work out how to do the trick, even as a team. We strongly recommend the introduction of automation in the office!