Business case
Our client, a large cooperative specialised in the production of oils, was looking to streamline its operations to increase its efficiency. We were called in to assist in restructuring several operationally linked entities to create an integrated value chain.
Thanks to our work, the contribution margins for each level of the value chain were identified; the cooperative’s businesses were managed more effectively; and quantitative analysis was used for tactical and strategic decision-making. This resulted in an optimised value chain for our client, leading to more efficient operations and increased profits.
Our role revolved around two key areas: the implementation of reporting procedures and the restructuring of financial flows. To determine and implement a reporting system appropriate for the cooperative’s activities, we were required to (i) determine the key indicators for each business line in the value chain, (ii) manage intercompany flows and determine their impact on each entity and (iii) create and implement automated reporting processes. As for restructuring the financial flows, we (i) clarified the roles and responsibilities of each player in the value chain, (ii) developed internal transfer pricing policies based on the market prices and the target ROCE for the various links in the chain, (iii) managed interactions with the commodities/processed materials market, (iv) defined official processes (annual budgets, short-term delivery commitments, performance, etc.) and (v) tracked and shared data among the individual players.