• Adhesives & Sealants
• Automotive
• Building Materials
• Chemicals
• Construction Products
• Food & Beverage
• Inks
• Material Sciences
• Paint & Coatings
• Personal Care
• Pharmaceuticals
• Plastics
• Polymer Sciences
• Printing Industries
• Private Equity

Problem
A global commodity chemical company, with operations in Asia Pacific, Europe and the Americas, was struggling with profitability and competitiveness. The company was unable to compete on a price basis with its larger competitors and was unable to capitalize on niche applications where it had a performance advantage.

Solution
It was determined that an inaccurate product costing system was a root cause of the company's problems. The misinformation generated by the costing system caused the company to execute a fundamentally flawed pricing strategy. Orr & Boss spent 14 months working in the company's Asia Pacific, North American and European operations to develop a new product costing system that incorporated actual direct costs and properly allocated indirect costs.

Results

• Several of the company's basic assumptions about product profitability were found to be false.
• Using new and accurate cost data the company's entire pricing policy was revised. This policy allowed the company to be more competitive with its larger rivals, particularly in Asia and Europe, and to leverage performance attributes in select applications.
• The company is now able to make informed, more effective decisions regarding investment in and divestiture of customer accounts.