Driving Performance across the Enterprise for a $1B Retailer
Client Background & Challenges
The president of a $1B after-market Truck and Trailer parts retailer with over 250 locations across the nation was looking to double revenues while maintaining margins, all under an aggressive timeline. The company engaged SSA to quickly identify and execute improvements that would become immediately apparent to customers and staff and in the financial statements. SSA identified enterprise-wide opportunities for improving key metrics across finance, technology, supply chain, and sales. SSA led this complex cross-organizational effort with a variety of short to medium-term projects that delivered significant EBITDA improvements.
Approach & Analysis
Through an in-depth assessment across the enterprise, SSA uncovered valuable insights and opportunities for performance improvement. For example:
- An analysis of store credit (which represents 80% of sales) revealed that the lengthy process for new customers to obtain a credit account led to millions in lost sales and significant customer frustration.
- Within the collections function, SSA used predictive analytics to identify which types of customers would pay their bills late and developed targeted interventions to mitigate this risk.
- SSA’s quantitative assessment of the company’s collections and customer service functions provided insights on how to optimize these functions for efficiency and productivity.
- Through an assessment of inventory accuracy challenges, SSA identified significant gaps in the controls for purchasing, and recommended system and process solutions to mitigate that risk.
SSA’s unique service model enabled the team to identify actionable solutions that drive performance and align people, process, technology and data. SSA’s team partnered closely with the company’s staff to rapidly execute and sustain improvements.
Results & Value to Client
SSA delivered a total annualized benefit of ~$9M and helped the company improve performance across its entire end-to-end value chain:
- Generate Sales: SSA identified opportunities to free up selling time by 25% to 30% by minimizing administrative activities performed by the sales team.
- Improve New Customer Credit Application Process: SSA rapidly, in only 60 days, deployed an online credit application and cloud-based credit processing system that reduced the cycle time from 20 to 3 days, giving every new customer over two extra weeks to make credit purchases. The company realized $6M in increased annualized sales via quicker and increased account usage.
- Increase Sales Through Credit While Minimizing Risk: SSA developed a comprehensive customer credit extension strategy that significantly enhanced the company’s ability to obtain and finance customer purchases while minimizing bad debt risk. This would ultimately allow the organization to increase market share and fuel its aggressive growth strategy.
- Improve Payment Collection: SSA redesigned the company’s collections and customer service functions to optimize workload type and volumes to key skillsets, creating a more efficient and dedicated workforce. Using insights from predictive analytics that uncovered which customers would pay their bills late, SSA designed an operational strategy to mitigate this risk before it materialized. SSA also implemented a rules-based collections management SaaS solution that delivers significant improvements in productivity and effectiveness in collecting past due balances.
- Increase Inventory Accuracy: SSA standardized work flow at the branches and improved the dock-to-stock cycle time by allowing improved visibility to inventory flow. In partnership with leaders across functions, SSA identified synergies to change the company’s physical inventory approach. The team then developed a cycle counting program that increased adherence from 60% to >90% and improved inventory accuracy by instituting root cause analysis process.
- Enhance Accounts Payable Function: SSA’s deep dive analysis of accounts payable exceptions identified solutions to process, organization and system gaps, allowing the client to capture almost 20% of early payment discounts from vendors that it had previously missed.
Related Capabilities and Expertise:
More Client Impact Stories:
- Optimizing the Order to Cash processes of a $300 million education company in order to contain A/R
- Leveraging Operations Data and Analytics to Optimize the Global IT Infrastructure of a Multi-Billion Insurance Firm
- Designing a New Operating Model for the Entire Middle Office of a Leading Brokerage Firm and Redefining Transaction Processing