4.1 Blog: Making Data-Driven Decisions
To help us all understand the cost, revenue, and profit associated with our new product launch, I was tasked to create a post to summarize my findings from the data collected last year. Our company goal was to create a profit margin of 25%, lets see the data and find out ways to meet this goal this year!
The first chart I will show you guys is a summary by month of all of our costs, including labor, materials, and overhead.
From looking at this chart you can see that the highest cost is materials. If there can be a start to aim for our 25% profit goal it can be to reduce cost of materials to increase profit. Towards the later months of the year labor and overhead started to even out, if we can continue to use decline costs in terms of labor and overhead we will be in a good position. But the main point of this chart is show that materials is what is putting us under.
My most important point is this next chart, Costs, Revenue, and Profit by month.
After reviewing this chart, our profit is steadily increasing by month, along with our total revenue which go hand and hand. The costs of goods also started to even out from July towards the end of the year. If we continue to go at this rate costs will go down and our revenue and profit will go up, in hopes of reach our 25% company goal.
And for us to end on a good note the last chart I’d like to include is our Target Revenue Vs. our Actual Revenue. In the chart below you can see we started a fair distance away from our target revenue. But throughout the year you can see each month we got closer and closer to our target. If we all keep up the good work the statistics are in our favor to hit our target revenue!
The importance of data analysis is best explained by Norah Wulff “Data analysis is important in business to understand problems facing an organization, and to explore data in meaningful ways. Data in itself is merely facts and figures. Data analysis organizes, interprets, structures and presents the data into useful information that provides context for the data” (Wulff 2019). Her explanation led to the basis of the formation of my charts to explain to my employees the progression being made to reach the companies goal. I took the data itself and presented in a way that provides context. The results of my analysis shown above allows us to create resolutions to lower costs and increase profit.
My most important findings is the cost of materials remaining the highest costs throughout the year. Which allows me to find a resolution in decreasing costs by decreasing costs of materials. The three graphics I selected seemed the most logical in which it represents one set of data and you can clearly see the highest and lowest of the three costs (labor, materials, and overhead). I then took that chart and made all of took all 3 costs and made their own bar. So now we can deduce the costs, revenue, and profit by looking into the first chart “costs” so that we can see further into what to improve. My last graphic was to build trust and empower my employees so that they can visually see our actual revenue getting closer and closer to our target revenue. My audience is exactly the reason why I included that last chart. I also decided to keep the information as clean and concise as possible, so that there can be no miss-deductions from the data represented.
Resources:
Wulff, Norah, director. Why Is Data Analysis Important in Business? Get Smarter, 8 July 2019, www.youtube.com/watch?v=fsSYpcV6lu8&ab_channel=GetSmarter.