Rated high on the list of things to know and track is your business profitability and profit margins by product or service. After all, without profits, the doors don’t stay open for long. Knowing your margins becomes even more important as your supply chain becomes more complex. Measure and monitor operational activities, as well as the income and expenses for those activities, with a powerful business management solution.
Depending on your specific industry and business operations, there are many variables that can affect the profit margin for a particular product or service. There are internal activities, such as the productivity of your procurement, production, and warehouse teams, as well as external factors such as the efficiency of your supply chain and economic conditions. All of these variables can have an impact on your profit margins and many of these factors can change on a regular basis. Which is all the more reason to keep close tabs on each and every business activity so that you can protect (or at least forecast) your margins and profitability. In order to monitor internal and external operations, you need to have an appropriate business management solution such as an enterprise resource planning (ERP) solution.
A comprehensive ERP solution provides control and insight over your core business operations including finances, inventory management, supply chain, manufacturing, project and services management, and other important activities. Once you can measure activities such as labor productivity and inventory costs, you can monitor the activities that surround a specific product or service. You can monitor inventory costs that have a potential to increase due to supply chain tightening or the decreased availability of certain raw materials, and take quick steps to find more cost-effective alternative sources. Monitor manufacturing and warehouse operations to find new ways to streamline activities that can improve labor productivity. Measuring and monitoring these activities is an important step toward knowing your profit margins and keeping them in alignment with strategic goals.
In order to keep profit margins healthy, you need to monitor them with real-time data and be able to react quickly to changes that can impact those margins. Get your fingertips on real-time, accurate business data with an appropriate ERP solution. Contact OmniVue for more information about using ERP to get to know your profit margins better.
By OmniVue, a Microsoft Dynamics GP and NAV Partner out of Georgia
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