|

Infographic: The Supply Chain’s Billion-Dollar Revenue Problem

View comments: newest first | oldest first | threaded
pocharle
User Rank
Supply Network Guru
Re: WoW
pocharle   3/11/2013 11:19:39 AM
NO RATINGS

I know. There is no sense in praising a billion in revenue if you have a billion in expenses.

The commission structure is a big issue. But I feel like these organizations have to bait the big guns in the industry with these incentives.

Mr. Roques
User Rank
Supply Network Guru
Re: Nice infography
Mr. Roques   2/28/2013 7:34:34 PM
NO RATINGS

I read that Apple and Google spent more on IP than R&D in 2012. Is that part of the money that is slipping away?

Michael Kerman
User Rank
Blogger
Re: WoW
Michael Kerman   2/28/2013 4:17:19 PM
NO RATINGS

pocharle, I hear you.  However, consider these two scenarios:

1)  What is the Billion dollars in revenue really should have been 2x more?

2)  It's not just about how much Revenue you MAKE, but how much you KEEP. 

This is a real issue re: sales commissions.  Many times, companies comp sales people based on revenue but do not take into account all of the incentives and promotions, etc.  So, it is easy for them to over-commission sales people because of expenses not accurately accrued.

pocharle
User Rank
Supply Network Guru
WoW
pocharle   2/28/2013 3:46:25 PM
NO RATINGS

Who would ever think that the words "Billion dollar revenue" and "problem" would be in the same sentence?!?!

Michael Kerman
User Rank
Blogger
Re: The cost of the tools
Michael Kerman   2/28/2013 1:46:46 PM
NO RATINGS

@prabhakar_deosthali, That's an excellent point. In fact, most companies aren't aware of the revenue they're leaking from ineffective contracts, over-paying on incentives, and more. Once they do, they are often quite surprised, especially when they consider how long it's probably been going on. In terms of solving the problem, a cost-effective solution is always a critical element -- I agree, nobody wants to solve a $100K problem with a $500K solution. But if it's a $10M problem, it can really be a no-brainer in terms of NPV, IRR, ROI, or some other payback metric.

Michael Kerman
User Rank
Blogger
Re: Nice infography
Michael Kerman   2/28/2013 12:51:11 PM
NO RATINGS

Hospice_Houngbo, I'm glad you found the infographic interesting. You bring up yet another "cost", the costs and risks relating to supplier and channel partner relationships.  Revenue management gaps can strain critical relationships or even cause partnerships to collapse.  This can cripple a manufacturer and at the same time, give their rivals a huge competitive advantage.  In the end, it is the shareholders or investors that shoulder this potential financial burden.

Hospice_Houngbo
User Rank
Supply Network Guru
Re: The cost of the tools
Hospice_Houngbo   2/28/2013 11:42:43 AM
NO RATINGS

@prabhakar_deosthali 

"we have to carefully weigh the cost of tools to save that billion dollar leakage "

If there is any tool that can help a company to prevent a billion dollars loss, I think it is well worth tryng. 

"the costs to efficient manage the revenue may be more than the revenue saved"

How that? Can you elaborate?

Hospice_Houngbo
User Rank
Supply Network Guru
Nice infography
Hospice_Houngbo   2/28/2013 11:25:36 AM
NO RATINGS

Interesting and neat visuals. I wish that money tap in the infography were in my backyard. :D How does the money lost by companies affect their commercial relationship with customers? Who pays for that loss?

prabhakar_deosthali
User Rank
Supply Network Guru
The cost of the tools
prabhakar_deosthali   2/28/2013 1:14:24 AM
NO RATINGS

Thta is true. A cent lost in a dollar in your pocket is many times not noticeable but when we talk of a 50+ biliion dollar business per quarter, that cent becomes equivalant of a billion dollar and that really pinches the business. 

 

However we have to carefully weigh the cost of tools to save that billion dollar leakage otherwise the costs to efficient manage the revenue may be more than the revenue saved



More Blogs from Revving Revenue
Some major players are making major changes to their channel strategies. Here are five reasons why that is happening.
Every company talks about managing revenue, and some think they are doing fine. Often, however, there are unforeseen problems.
High-tech organizations haven't evolved their revenue management strategies to keep up with the times. They have their reasons… but most of them don't really make sense.
Smart contract management can deliver big business value.
In every industry, accrual calculation confusion can lead to chaos... but there are ways to make things go more smoothly.
Twitter Feed
EBN Online Twitter Feed
EBN Dialogue / LIVE CHAT
EBN Dialogue enables you to participate in live chats with notable leaders and luminaries. Open to the entire EBN community of electronics supply chain experts, these conversations see ideas shared, comments made, and questions asked and answered in real time. Listed below are upcoming and archived chats. Stay tuned and join in!
Archived Dialogues
Live Chat 01/15: CPOs Re-Shape Their Business Roles
Increasingly chief procurement officers (CPOs) are re-shaping their organizational role to focus on creating results far beyond cost controls. A new IBM survey explores how.
Live Chat 11/12: Examining the Cyberthreat to Supply Chains
The number of cyberattacks is on the rise and hackers are targeting the supply chain. Drew Smith, founder and CEO of InfoArmor, will be on hand to discuss the reality of today's threat landscape and what to do about it.