5.4 Production Analysis

The Production Analysis (page 4) reports detailed information about each product in the market, including sales and inventory levels, price, material and labor costs. Are you or your competitors building excess inventory? Excess inventory puts pressure on profits (see “8 Forecasting”).

The Production Analysis also reports product revision dates. Does a competitor have a product with a revision date in the year after the year of the report? This indicates a long repositioning project that will possibly put that product into another segment.

If a revision date has yet to conclude, the Courier will report the product’s current performance, size and MTBF. The new coordinates and MTBF will not be revealed until after the completion of the project.

Check your competitors’ automation, capacity and plant utilization. Increases in automation reduce labor costs and this could indicate competitors might drop prices for those products. Did a competitor reduce capacity? Selling capacity reduces assets. Running the remaining capacity at 150% to 200% can improve Return on Assets (ROA).

The Production Analysis will report the release date (but not the coordinates) of a new product if:

• Production capacity is purchased; and/or
• A promotion budget is entered; and/or
• A sales budget is entered.

Are your competitors investing in capacity and automation? The Production Analysis reports capacity and automation ratings for the upcoming round. The Financial Statements survey reports the cost of plant improvements for all companies.