Most analytic software is designed to address the palette of business challenges operations and finance must collaborate on. These products' have a broad direction, trying to address as many issues as possible. Maxager Technology's Maxager 7.3 analysis system, however, targets a specific range of challenging problems head-on with a sharp focus and an original point of view aimed at squeezing an extra 3 to 5 percent of profit out of the production capacity.
The software sops up back-end data, normally from an ERP system, to deliver return on assets (ROA) results, a single metric that's the result of Maxager founder and CEO (and well-known economist) Michael Rothschild's epiphany. His uncommon twist is this: rather than measure net margin by product, the right way to attack the measure is to calculate the margin per minute that your assets are capable of generating for each of the different products you might build with them.
For example, instead of a more standard analysis' conclusion that a higher margin-per-unit product is the optimal choice to run through a manufacturing line, one might discover that a slightly lower-margin deliverable can run at two or three times the production rate, making the lower-margin product the bigger margin generator. Thus, Maxager's system has the potential to resolve a natural conflict between operational production, marketing, and finance by combining each of their treasured measures and synthesizing their world views.
The Maxager 7.3 client has graphical displays for quick feedback, such as the topographic map (pictured above) that shows profitability and volume in an overarching, strategic view.
For the tactical view, an adjacent tab (pictured at right) shows key indicators for the product offerings so decision-makers can keep up with performance in near real-time. And while analysis of individual products is in itself a useful ability, you can use the same toolset to evaluate the ROA of various customers.
A what-if predictive analytics console (see below) projects and interacts with an analyst to propose and examine various product mixes aimed at increasing ROA, with a variety of key indicators to deliver shaded results that provide a complex perspective.
Rothschild brewed up the idea for Maxager based on the “Theory of Constraints,” an emerging power in management most usefully and readably described in the various postings at Frank Patrick’s Focused Performance Business Blog. Based on what I've seen, Maxager's uncommon take on business performance management stands to provide a persistent competitive advantage to the organizations that master it.
Maxager 7.3
Cost: Browser-based subscription service; “Fast Track” program starts at $20,000
Verdict: So far unique in its deliverables, Maxager 7.3 embodies a new way of looking at organizational throughput. By helping analysts devise ways to squeeze out more net margin per minute, it aims to deliver better return on assets. Every multi-product organization looking to find more net will find the approach well worth examining.
Posted by Jeff Angus on January 18, 2007 10:08 PM
