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Sorocaba Refrescos Increases Gross Margin by Analyzing Customer Profitability Data

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Sorocaba Refrescos, a leading player in the Brazilian beverage industry, has grown from a local company to a national powerhouse. Its extensive product portfolio includes carbonated drinks, fruit juices, energy beverages, and bottled water, all crafted with a commitment to quality and innovation.

Employing advanced manufacturing techniques, Sorocaba Refrescos ensures product consistency and safety. Its robust distribution network guarantees widespread availability, while sustainability initiatives highlight its environmental responsibility. This evolution from a small enterprise to an eco-conscious industry leader underscores the company's enduring impact on the market.

The Challenge

Prior to Soracaba engaging Avvale's services, the company was facing several challenges related to data collection on customer profit margins. Previously, this process took place every quarter, due to the large volume of information and the significant cost involved in hiring an external consultancy for this specific task. This restrictive approach hindered agility in implementing short-term sales strategies, given the sensitive nature of customer data and the quarterly collection and compilation of information.
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The Approach

In order to overcome these challenges, Avvale closely collaborated with the client to address its needs. The controllership area implemented the Oracle EPM Cloud Planning tool to handle the company's budget planning. This initiative has reduced the time required to close and analyze financial information for the Controller's Office, thereby speeding up all information deliveries to its internal customers.

At this point, the Commercial Finance team identified potential in the solution to execute the criteria for allocating expenses by client and generating a monthly expenditure base. 
With extensive experience in implementing profitability solutions for other clients, Avvale carried out a comprehensive assessment to map out the process, suggest changes, and draw up an execution plan to create a robust and permanent tool that would meet the area's needs.
This solution provides enough flexibility to manage allocations, scalability to include new apportionment criteria, and, most importantly, to calculate indicators quickly, empowering the company to devise more efficient short-term strategies.

The core components of the solution involved the integration of revenue and cost data per customer, the inclusion of expenses from the sales, logistics, and marketing areas, and the provision of user-defined criteria for allocating expenses to customers.

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The Impact

By allocating data according to customer segmentation, Sorocaba is now able to generate a service margin for each point of sale and product sold. This process was carried out in two distinct phases:

  1. The daily one, yielding gross margin information to support the sales team directly engaged with clients and monitor sales execution in relation to the target set.
  2. The second phase was the monthly closing, where the already accounted-for expense data in the support areas is allocated by the client to make up the profitability of each point of sale.

This made it possible to identify and classify customers, measure the main expenses, and define sales strategies to increase production efficiently and assertively. The result was an improved product mix offered at each point of sale, resulting in an enhanced business margin.  Implementing Oracle EPM saved operational time and allowed the sales team to concentrate on analyzing and fine-tuning processes to deliver more effective customer service, thus optimizing production and logistics, with a lasting and positive impact on the overall process.

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