The following abstract represents a summation of the work by SPAIPA SA, a Brazilian Beverage Bottler. The original academic whitepaper was published by our client and is also available. The case study was co-authored by the company CEO, an MIS professor, and an IT consulting company. Salient had no part in the original development of the whitepaper.

Coke Brasil is one of the largest beverage bottlers in South America with about 1,800 employees. Approximately 3 years ago, the company embarked on a mission to morph into a company with a profitability culture. Their story is inspiring because they looked beyond the mere implementation of technology as a solution. Instead, they re-invented their culture and then applied a technology solution that would enhance that culture to achieve explosive growth. As a result, the company gained 3 percent in operational margin.

Coke Brasil, although very successful, believed that it had devolved into a culture of turf protection and volume rather than profit. The management team identified systemic organizational issues. For starters, compensation plans were working at odds – the sales team was compensated on volume and the management team was compensated on profit. As a result, the sales teams focused on volume almost exclusively and they were very successful, while profit goals went unmet. 

Additionally, production teams and sales teams created loss-inducing safety nets in order to protect themselves. Production teams over-produced to protect themselves from unplanned sales drives, while the sales teams under-estimated sales to ensure goal achievement. To further exacerbate issues, each manager used a different method for calculating results generating extensive discussion, but no consensus on the right calculations. Without consensus on the correct calculations, no effective corrective marketing action could be taken.

The company searched for a solution to help them achieve numerous goals. They needed to develop a balance between sales volumes and pricing to align the company toward a profit focus. That required a tool that allowed them to select criteria to stimulate margins at the right time, facilitate margin management while monitoring returns, and the ability to map clients, products, and preferential distribution routes effectively. Having such a tool provides the sales team with a resource to help decide whether to give discounts to clients based on activity.

Coke Brasil developed a discussion group to formulate a strategy for solving the profitability equation for stockholders and creating better service for clients. The discussion group included members from production, sales, distribution, and support. The group was directed to focus on a solution that facilitated a change in approach for four key areas- culture, technology, data, and information.

Coke Brasil selected Margin Minder^® from Salient as the solution that met all of the requirements outlined by the management team and the discussion groups. Margin Minder, however, was not a mere technology solution. The system was a perfect support for the underlying goal of changing the company culture to one of profit.

Three years after the implementation of Margin Minder^®, Coke Brasil gained 3 percent in operational margin and 4 percentage points in the value share of the soft drink market. At the same time, it gained 3 percentage points in market share in new products and beer. Demand forecasting is 98% accurate, allowing for a substantial reduction in product stock. Additionally, the broadening of the assertiveness level in the flow of case revenue improved by 99%.