Solutions
Vayoom was born out of the need to optimize profitability for both successful and struggling businesses by providing a clear understanding of costs and revenues.
ACHIEVE TRUE PROFITABILITY WITH VAYOOM SOLUTIONS
A new and innovative approach to manufacturing profit & cost analysis
Product Stratification to Target Improvements
Most manufacturers seek to understand the precise cost of production. Traditional methods of aggregated analysis serve after-the-fact accounting purposes and are not suitable for managerial decision-making. Product costs fluctuate with variations in product mix, labor composition, and supply chain issues. Due to the absence of an accurate method for appropriately distributing cost to each product, managers are unaware of which products are truly profitable.
Vayoom’s True Product CostTM algorithm distributes the cost to each product accurately creating individual customer and product P&Ls. It utilizes operational data to proportionately distribute the cost and segments products into profitability groups.
Product-Based P&Ls Outperform Time-Based P&Ls
While time-based P&Ls are useful for overall financial reporting and compliance, product P&Ls provide a more detailed, decision-oriented view that directly supports business growth and profitability optimization.
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Direct Profitability Insights – Product P&Ls help businesses understand which products generate the most profit, allowing for better resource allocation and pricing strategies.
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Cost and Revenue Alignment – Unlike time-based P&Ls, which often allocate costs arbitrarily over periods, product P&Ls match costs directly with revenue, giving a more accurate picture of product margins.
- Better Strategic Decisions – By focusing on individual products or services, businesses can identify high-performing and underperforming areas, making it easier to optimize portfolios, discontinue unprofitable products, or invest in high-margin ones.
- Operational Efficiency – Understanding product-specific profitability helps improve supply chain, production, and marketing decisions, leading to cost reductions and efficiency gains.
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More Accurate Pricing Strategies – A product P&L enables data-driven pricing decisions based on actual profitability rather than broad financial trends seen in time-based statements.
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Flexibility and Scalability – Businesses can evaluate new product launches or market expansions with product-level financials, making growth strategies more data-driven
Key Benefits of Vayoom
True Product CostTM
Create customer profit centers with individual product and customer P&Ls
Profit Analysis
Target operational and financial improvements with product stratification
Accurate Quoting
Reduce time to quote accurately with options to negotiate higher prices
Why is this Approach Better?
- Revenue and cost occur at different times
Understanding the dynamic interplay between revenue and cost is essential because they occur at different rates and times. Understanding the breakdown of indirect cost is critical to improving profitability. -
Proper distribution of indirect cost is essential
Unlike conventional approaches that use direct variables to allocate indirect cost, a better approach of using product and process attributes is required. Vayoom’s proprietary True Product CostTM algorithm changes the P&L assessment from time based to product based creating Customer Profit Centers. This drives the improvement initiatives focused on profit performance.
- Demand and product mix drive operations
Synchronization of production with demand and product mix reduces the need to build up inventory while reducing working capital requirements. Demand driven resource budgets improve purchasing practices and reduce the chances of stock-outs. -
Product profits impact each other
Production that shares resources such as equipment, materials and labor affect production cost of each product. Although the direct cost do not change, but the distribution of indirect cost is dependent on the resource use by each product. This has significant impact on the individual product profitability.