Complete Gross Margin improvement framework

Posted above is a time tested framework for significant gross margin improvement to your business unit's overall gross margin.

Simple but very powerful. If you can deploy these buckets wisely then GM savings can be anywhere in thousands or millions .. depending on your operations scale.

 

Five pillars of Gross Margin Improvement

When growth comes to standstill or products start to become commodity …nothing else matters as much as maintaining your Gross Margin.

A company can have stagnant revenue but Wall Street will still reward it's shares if it show profitability growth and how do you do it? Look no further than Gross Margin.

Essentially the five pillars of Gross Margin improvement are:

1. Financial Planning
2. Operational Effectiveness
3. Pricing Optimization
4. Product Management
5. Sales Effectiveness

Want to know more? I am working on a Gross Margin play book. Drop me a note and will be glad to share.

Operational effectiveness as a Gross Margin tool

Effective Operations can help your company move in the right direction w.r.t. Gross Margin.

The 8 top most things that come to my mind when we look at GM in high-tech industry from an operations perspective are (in no order of importance).

Operational Effectiveness

NMS - (Fixed + variable) Others

Portfolio Alignment

NMS - Freight Savings

Over Head

Transformation Savings

Supplier Savings

Product and Theater Mix

Royalty Management

We will drill down into each some other day in a white paper.