Q&A: David Even-Haim, President of Profitect
By Jon Whiteaker - 10:12AM - Thu 8th September 2011
Explain what profit amplification is and how it can help retailers?
Profitect’s profit-amplification solution enables retailers to quickly discover and actualise untapped profit opportunities across the entire retail value chain.
Profitect’s algorithms quickly identify measurable profit optimisation opportunities through the identification of value chain margin leakage, shrink, waste, process errors, and operational risks and damages - returning intelligent, prioritised actions for increasing profit.
For more than 15 years, Profitect’s expertise has successfully amplified profits for retailers worldwide and delivered immediate ROI supported by modular, quick, non-disruptive deployment of modern, scalable technology and time-tested best practices. With 100 per cent customer success, Profitect consistently fulfills its commitment to deliver more than five per cent profit increase within six months.
How has a system designed to help combat terrorism been adapted to work in the commercial sphere?
Our roots are in Homeland Security and anti-terrorism.
Systems developed by our professionals to protect airlines and air-freight operations against external adversaries, had later been diverted to protect similar supply chain operations, within the extended retail industry, against various risk factors to their efficiency and profitability.
The essence of our algorithms is to pinpoint problematic transactions out of millions of legitimate ones. Be it one bomb out of so many shipments or one buying decision out of enormous number of purchase orders.
In your experience what are the most common causes of loss for retailers?
There is a trade-off between common and high value. We have found that common issues have a relatively low value per case, whereas the less common have much higher value per case.
In all these, the higher are those in which internal elements are involved. By internal I refer to employees, managers, suppliers and even systems. One more key observation is that the higher losses are those related to processes.
Are most retailers effective at managing shrinkage, do you see it is a growing problem?
Most retailers have a reasonable control of their various losses. In most cases you will find a stable or a slowly reducing trend. However, in current retail environment this might not be sufficient.
With more price-conscious customers, more aggressive competition and tougher economy, retailers face a growing threat to their net profitability. The immediate retail reaction of cutting costs is exhausting itself and is leading to reduced service level and even reduced sales.
So a more advanced approach to loss reduction, as part of a comprehensive profit amplification solution seems to be one of the most significant ways for retailers to retrieve profits.
How much loss do you think retailers can cut from their operations by using your algorithms?
We are committed to a five per cent profit increase within six month of going live.
It is important to remember that losses are not limited to shrink, and are not necessarily related to adverse intent.
Most of retailers’ profit amplification opportunities are related to erred commercial and pricing decisions, insufficient processes, waste, operational damages, mark-downs, etc. We can aid in all of these areas.