Frequently Asked Questions
Who is Profit Velocity?
Profit Velocity is a highly specialized analytics provider that serves both financial and operating professionals working with complex manufacturing industries. We deliver advanced profit per time analytics and data visualizations to financial consultants, investment bankers, private equity investors, performance improvement consultants and manufacturing management teams. Our proprietary analytics platform reveals previously invisible profit gain opportunities and helps decision-makers define practical roadmaps to substantial increases in revenue and profit.
What does Profit Velocity mean?
Profit velocity is the speed – dollars per machine hour – at which manufacturers produce profits from their production assets. Profit velocity is calculated by integrating the traditional management accounting metric of margin per unit with the production speed of each product for each customer to calculate precisely how fast each product/customer combination flows cash and profit to the bottom line. Once this new metric is adopted, profit velocity is relied on by decision-makers in sales, marketing, production and finance as a common metric for making day-to-day operational choices and longer-term strategic moves that accelerate cash flow, drive earnings, increase return on assets and raise shareholder value.
Who uses Profit Velocity?
M&A advisors, private equity firms, management consultants and management teams rely on the proprietary analytical output of Profit Velocity to gain comprehensive visibility into the profit opportunities and risks that exist within complex manufacturing firms. In many cases, Profit Velocity’s professionals use our tool to deliver bespoke manufacturing analytics to our partners and clients. In other cases, we provide direct hands on access to our technology so that our partners and clients can generate their own time-based analytics.
What are the basic drivers for adopting Profit Velocity’s technology?
Complex manufacturers, those producing thousands of distinct product varieties for many industrial customers from multiple facilities, are often overwhelmed by the volume of raw data their systems capture. At the same time, they are woefully short of timely and actionable insights drawn from all that data. Senior executives and the advisors working in complex manufacturing seek to gain mastery over the great complexity they face, so they turn to the unique time-based profit analytics of Profit Velocity to help them see through the ‘cloud of complexity’ and deliver outstanding results to investors.
How long does it take to set up the Profit Velocity tool?
Typically, it takes a few weeks to set up our analytics platform to begin turning data into revealing insights. While most sophisticated information systems take months or quarters before they start delivering worthwhile information, many years of technological and process refinement allow Profit Velocity to deliver compelling insights even within the extremely tight timeframes of due diligence efforts.
How do you deploy Profit Velocity?
In most cases, we host our cloud-based platform. But we can also accommodate major corporations who require on-premises deployment.
Who benefits most from harnessing Profit Velocity’s insights?
Shareholders. Profit Velocity’s focus on profit-per-time metrics is directly aligned with the investor goal of boosting the ROA and ROE of a manufacturing business. Since the value of every business is determined by how fast it can create profit, Profit Velocity’s time-based metrics perfectly match every shareholder’s fundamental reason for investing in that business.
What does Profit Velocity cost?
The cost of each engagement varies based on the scale of the project and the level of advisory services required.
Are there any limits to how large or small an enterprise must be for Profit Velocity to work?
No. Profit Velocity’s analytical platform was designed to serve the broadest spectrum of complex manufacturing firms – from privately-held lower middle market manufacturers to the largest and most complex publicly-held manufacturing enterprises. Our flexible design and robust data handling capabilities support manufacturers whose revenue levels range from tens of millions to tens of billions.
How are Profit Velocity’s data-derived insights displayed?
Our proprietary platform turns enormous amounts of data into easily understandable, yet very meaningful data visualizations. Thanks to our instantaneous, enterprise scale ‘what if’ modeling capabilities, decision-makers can see precisely how potential changes in volumes, prices, costs, productivity and mix will impact results before they make their decisions.
How often does data need to updated?
We update data as frequently as our partners and clients desire. During a due diligence exercise, we typically handle just one or two data loads given the compressed timeline of such efforts. By contrast, when our platform is deployed to support ongoing performance improvement initiatives, we work with data refreshes that range in cadence from daily to monthly.
Do we need ‘perfect data’ to harness Profit Velocity’s data insights?
No company has perfect data. No such thing exists. At Profit Velocity, a key benefit of our tool and methodology is our ability to convert a limited set of reasonable (but far from perfect) data into extremely potent, profit-enhancing management information. See our article on Profit Velocity and Data Quality for more details.
What enterprise solutions integrate with Profit Velocity?
Profit Velocity is agnostic when it comes to working with other information systems. We require specific data elements to feed our analytics, but Profit Velocity has no requirements as to what systems that data comes from. When deployed in support of ongoing performance improvement efforts, our platform can be set up to automatically flow data from/to ERP, CRM, production control and other systems.
Why don’t other firms offer time-based profit analytics?
Although measuring profit per time is simple in concept, there are significant technical challenges in building a commercially robust information platform that can quickly deliver precise and comprehensive time-based profit metrics for manufacturers across a wide array of industries.
What languages does Profit Velocity support?
At present, we support English, simplified Chinese and traditional Chinese.