Leading supermarket chain Morrisons has signed a new profit-amplification solution deal, which the provider predicts will result in a five per cent profit increase in just six months.
Profitect is a software company which specialises in discovering and resolving leakages across the value chain, working on top of any existing systems used by a retailer.
In its initial roll-out of its solution at Morrisons, Profitect’s algorithm will initially be looking for patterns of loss in the supermarkets newspaper and magazine product lines.
“Morrisons sees Profitect as a strong partner for amplifying our profit opportunities,” Peter Haste, Senior Finance Manager at Morrisons, said.
“We are leveraging the Profitect Suite software solution for a rapid, dynamic and comprehensive approach to amplifying profit opportunities identified in our Newspapers and Magazines division.
“If successful in Newspapers and Magazines, we will look to roll out Profitect’s solution to additional categories.”
Profit margins are becoming increasingly squeezed in the current retail environment as higher commodity prices and increased promotional activity hit company’s bottom lines, making Profitect’s services particularly valuable.
Its partnership with the fast-growing Morrisons shows that it’s services are not just sought after by struggling retailers however, and the software provider is very proud of it five per cent profit lift target which CEO Guy Yehiav claims it often surpasses.
“Forward-thinkers like Morrisons are taking the initiatives to grow margins and enhance profit opportunities. This new relationship testifies to the validation for the need of profit amplification across the supply chain,” Yehiav commented.
Initially starting out identifying suspicious luggage for the aviation industry during the late 1980’s, Profitect shifted it focus after an opportunistic K-Mart board member spotted the potential of it algorithms to locate loss in the retail market.
Sitting on five separate modules of the value chain (point-of-sale, inventory in-store, delivery, transportation/warehouse, and procurement), the solution identifies instances of shrink, waste, process errors, and operational risks and damages.
Yehiav says that although the multitude of solution systems used by retailers are typically efficient and affective, they are often blind to anomalies which can affect profit margins and which Profitect is adept at picking up.
He continued: “With 100% satisfaction in customer installations, Profitect consistently fulfils its commitment to deliver more than a five per cent profit increase within six months: I look forward to seeing rapid results with Morrisons as well, driving efficiency and profitability quickly to their bottom line.”
Other retailers currently using Profitect’s system include Marks & Spencer in the UK, Metro in Europe and Abercrombie & Fitch in the US.