Product profit management: The key lever of operational effectiveness improvement

Jun 2015

Why should we talk about product profit?

It is due to the headwind against manufacturing industry causes a decline in profits in China. Some companies have gained profits in general; however, they are uncertain about profit contribution from each product line. Moreover, some products are suffering a loss without noticing by the companies. When economy grew rapidly in the past, the increasing of sales and the expansion of product lines are the key factors that companies cared more about rather than product profit.

Nowadays, with a more moderate growth rate than before under the new normal economy, company executives start to consider how to manage specific product profits and to improve operation quality. This is not only a shift in concept, but also a turning point in operational management.

Thus, focusing on product profit management is inevitable under new normal economy.