You work for a boutique consulting firm specialized in turn-around management for SMEs. Your next assignment is Hometic, a small Swiss furniture manufacturer that has recently experienced some difficulties. You have been provided a dataset that covers the 2010 and 2011 sales. To run the dataset in the app, type "SME" in the "choose a sample dataset" widget. You have a meeting with the owner and CEO, and you want to quickly get up to speed on the situation of the company.
Multi-tier bar chart
See how a dimension - here customer - plays out in the two periods on a metric - here amount.
Sales have gone south for many important customers...
...with a generally proportional impact on margins.
See how two metrics - here sales and margins - play along a given dimension, here consumer.
See how a metric, here revenue, interacts along a pair of dimensions, here category and consumer.
There is little overlap between product families bought by the three top customers,...
...and even less communality among products.
Around 200 products out of a total of 800 are only bought by one customer.
See how a dimension - here family - plays out in the two periods on a set of metrics - here price.
Y-Zoom average purchasing price varies widely by family...
...which explains the camel-shaped price distribution curve of Y-Zoom's purchases.
Sales variance analysis
See aggregated sales variance or split variance between its components (volume, price, mix, drivers,..).
Sales fell due to lower volumes at practically constant prices.
Margin variance analysis
See aggregated margin variance or split variance between its components (volume, price, unit costs,..).
Hometic's EBITDA bridge shows that net margin did not change much, thanks to a reduction in indirect costs.
WHAT CHANGED IN SALES
FIRST RESULT COMBINATION
Sales of the most important product category, Chairs, decreased by 17%. Tables and Lamps increased, but from a small base.
Purchases of product 1634 by Dingquokik, another important customer, fell 63%, by almost 200k.
Waterfall chart format
Whenever possible, charts are built in accordance to the IBCS standard. Green is "good", red is "bad", white is "plan", grey is "previous period" and black is "actual".
While Dingquokik almost made up the loss with higher purchases of other Hometic products, the reason of the reduction in product 1634 purchases should be investigated.
The chairs category did in fact disappoint.
BY CATEGORY DUMBBELL PLOT
Slice variance by category filtered on customer.
Y-Zoom, the company's largest account, was responsible for the largest loss of revenues: Y-Zoom reduced purchases by 16%: Chairs purchases by 19% and Tables by 8%.
The reduction in Y-Zoom purchases hit the Gladius product family especially hard.
The first row result of the first waterfall identifies the chairs category, not the reduction of purchases by Y-Zoom, the largest consumer, as the first driver of sales loss.
This is of course open to dispute. There is no "right" answer.
Chairs lost 734k (-17%) revenues, while Y-Zoom revenue fell by 445k (-16%). Arithmetically, putting the loss in Chairs first makes sense. On the other hand, there are four categories and tens of customers, so one customer alone pulling down revenues by 8% is definitively something worth notice.
The app returns both views of what has changed.
The second and third row results point to a product swap by Dingquokix, the second most important customer, that resulted in a 50k net loss in revenue.
The forth row result shows that Tables actually did quite well.
SECOND RESULT COMBINATION
Variable dimension variance - Sales
Variable dimension variance helps see the interaction between the change in sales across the different dimensions.
Hometic also had a few customers that increased purchases, like Scotcan and Zoodrill, but this was largely insufficient to offset the losses....
....that spanned are across the whole customer spectrum.
Consistency of results
Alternative result sets are always consistent. The different sets of results combinations might show similar elements from slightly different angles, potentially helping to unlock insights.
The second waterfall focuses on customers, showing the losses of the top two customers and the gains of a couple of others.
The second row result does not return the full net revenue loss of Dingquokix, that is equal to -162k as shown in the chart below. It returns the highest revenue loss among all Dingquokix products which is tied to product 1634 and equal to -185k. Even though the loss of product 1634 sales were partly compensated by other Dingquokix purchases, it is interesting to see the top negative item.
THIRD RESULT COMBINATION
Consistency of results
Alternative result sets are always consistent. The different sets of results combinations show pretty much the same elements from slightly different angles, potentially helping to unlock insights.
Some chair families lost over 40% of sales.
Below a more detailed view that shows instances of chair losses with family, product and customer detail.
All the main product families lost sales and margin contribution, with the sole exception of Soma, that held, and of Natura, that grew somewhat. Surprisingly, some smaller families grew in sales and margins.
The third waterfall focuses on product families, showing cases with double digit loss. This is actually a different way of looking at the top customers' reduction of purchases, since the purchases of top customers tend to be concentrated on a few product families.
Every dataset is different
This use case is based on a fake dataset. Test run the app with your data to confirm the advantages of the variable dimension variance approach in your specific use case.
WHAT CHANGED IN MARGINS
FORTH RESULT COMBINATION
For each set of parameters, the app can generate up to ten alternative sets of results. To see a different alternative set of results use the "Return alternative results" widget.
The loss of margins follows the same pattern as the loss of revenues, with most of the loss tied to the chairs category.
The forth waterfall is a reflection, from the margin side, of the "by category" first waterfall. This is expected since margins are similar across all products and therefore sales and margin changes tend to match.
FIFTH RESULT COMBINATION
See another angle
This second waterfall shows a different view of the data.
The loss of margins is due to a fall of volumes, not to an increase in costs: the margin rate stayed the same.
The fifth waterfall is also a reflection, from the margin side, of the "by category" first waterfall. This is expected, since unit costs do not change between the two periods and prices remained relatively stable.
SIXTH RESULT COMBINATION
Finding patterns in data
'Mparanza uses variable dimension variance to help find patterns in the data that could be missed with a traditional slice and dice approach.
The gross margin impact by customer mirrors the revenue impact by customer.