ECCO MAKING PROFITABLE DECISION-MAKING EASIER THE CHALLENGE Trying to do something about falling profits can be a bit like trying to hit a moving target in the dark: It helps if you can somehow shed light on things. The ECCO Group noted that its profitability was falling while costs were on the rise. However, a lack of transparency hampered the various efforts to identify the specific problems in the global value chain – it was, quite simply, difficult to know exactly where to begin. THE SOLUTION Working together with Valcon, ECCO established a global system to help manage profitability. The system gives access to full information and transparency, thereby enabling managers and employees to make adjustments in exactly the right places – and in due time. Part of the solution involved an ABC (activities based costing) analysis, which shows the resources required for each individual process within procurement, production, sales, and logistics. To make this data easy to access and translate into real-life action, it has been implemented in an ABC calculator capable of assigning costs to the areas defined. THE RESULTS ABOUT ECCO Founded in 1963, ECCO is a family-owned shoe manufacturer specialising in casual comfort shoes. ECCO control all stages of its manufacturing process. The group has its own designers, its own tanneries, and its own factories. In 2010 the ECCO Group’s net turnover increased by more than 21% to DKK 6,111 million in 2010. The ECCO Group has more than 17,500 employees in over 50 countries. TESTIMONIAL ”With this project we wished to make sure that our decision-making was made on the basis of fact rather than faith. We now have the ability to generate reports on profitability in relevant aspects of our value chain – and to create different simulations of the potential future profitability of different scenarios.” Annemette Nøhr, CFO, ECCO SECTOR Industry EXPERTISE • Business transparency Now that ECCO has achieved transparency throughout the entire value chain the group has a global overview of its activities. The true profitability can be ascertained for all markets, customers, products, and distribution channels. All this means that the group can make its decision on the basis of confirmed facts, not assumptions. Furthermore, this means that data can also be used proactively to improve profits.
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