We wrote earlier about the robust cost and profitability calculation system Astrada5, which has absolute advantages like the ease of modeling, the overall profitability focus due to the software’s good coverage, and a broader understanding of cost and profitability factors that Astrada5 enables. The system is strengthening its foothold on Finnish and Polish markets in Bilot’s Profitability Management portfolio.
We, of course, know the excellence of the system, but we think that you would prefer to hear it in the words of Astrada5 users. Therefore, we gathered experiences from customers of the system – it’s time to let the end users let it all out.
Less bad business, more good business
It is best to harness a company’s limited resources to do better business by reducing the use of resources to bad business. Most important is the overall understanding – sometimes it is useful to think about cost and profitability with regards to an individual product or customer, at other times from the view of the entire product and customer portfolio.
However, the impact will always go deeper into business processes: a decision about a single product or customer may be significant in terms of improving the efficiency of machines and people.
“Avoiding unprofitable business is much easier thanks to the system. Even more important, however, I see that internal communication between sales, marketing, accounting, and management has improved. The biggest benefit is that, based on the data produced by the system, we discuss our business much more.”
“Astrada5 is unique. It is probably the most comprehensive and best-performing solution for any big company. We now know what kind of products we want to develop to our customers and we can steer sales to the most profitable customers.”
From feelings to facts
The actual image of profitability is blurred easily if calculations are irregular and simplified. In decentralized calculations, when the comprehensive picture of revenues and expenses is obscure, decisions are easily made based only on gut feelings.
“As a representative of the Technical Department, it is especially important for me to define the price of cutting quality. This is the first time we can do that. In every field, it is said that quality is important, but in the same breath, decisions are made to undermine quality. Recognizing the savings may seem clear: if one step is thrown out of the process completely, it’s easy to think that this has now saved € 100,000 a year. The effect of the cut on quality is much more difficult to notice. If you know how the decision affects quality, you should also consider what kinds of costs the quality reduction causes. Many do not know these costs. Thanks to Astrada5, we know, and I think it is the system’s biggest benefits.”
Identifying development needs and creating clearer cost-efficiency goals
A better understanding of the cost-efficiency of different production and service activities makes it easy to set up well-defined goals for improving efficiency. Astrada5’s simulation scenarios illustrate the effects of, for example, throughput volumes and automation, or removal of work steps.
“Thanks to the modularized product platforms, the number of different parts in our products has decreased. There is also less need for administration when the range is streamlined. Our previous product cost calculations could not steer us in that direction.”
“Astrada5 shows us the issues we knew about, but which our old calculations did not reveal in concrete numbers. The implementation of Astrada5 has also considerably reduced time spent on updating the costing data and the execution of our budgeting process.”
The ever-evolving tool meets the needs of customers
Astrada5 has had end-user focus since the beginning, and the user interface and functionalities are constantly being improved. In addition to the dynamic and modern tool, Astrada5 has strong customer support.
“Astrada consultants have very good communication skills: they can simply explain what they are doing and how. They have a strong experience in the manufacturing industry, and they know how to avoid stumbling blocks when designing a profitability model.”
“The solution is very effective. Astrada’s motivation and, above all, the ability to solve our problem impressed us – especially since, in all honesty, the problem wasn’t initially clear for us either.”
This text is co-written by Bilot’s Business Lead Samuli Sikanen and Astrada’s CEO Tomas Bandmann. More information on the development of profitability calculation and Astrada5:
Finland and Poland: Samuli Sikanen, samuli.sikanen@bilot.fi, +358 (0) 50 5989196
Sweden and other markets: Tomas Bandmann, tomas.bandmann@astrada.se, +46 (0) 73 640 80 86
