Production and heavy industry companies sell output and reliability
Revenue is driven by throughput, utilisation, and operational reliability, and margin is shaped by fixed costs and utilisation levels. Growth is constrained by physical capacity and complex cost structures rather than by demand generation.
- Margins are shaped by fixed costs and utilisation levels
- Revenue depends on volume, uptime, and efficiency
- Sales is technical, with people who may not be trained commercially
- Pricing is often inherited rather than actively managed
- Commercial decisions are tightly coupled with operations
Our experience in Production & Heavy Industry
Optimum
Roydon Recycling
Kinkelder
inprotec AG
Innomar
Gouda Refractories
Giesen
Euramax
Castolin Eutectic
BAU KING
2Connect
Woodvision
Transcarbo
SoFine Foods
RECOHow the sector usually works
Most production and heavy industry companies have evolved their commercial setup around operational excellence rather than pricing or revenue optimisation. Sales and pricing decisions are often driven by historical precedent, cost assumptions, and volume targets, while true profitability varies widely across customers, products, and routes.
- Sales and operations are tightly intertwined
- Pricing is often cost-plus or volume-driven
- Engineers are a bottleneck for sales
- Commercial decisions prioritise utilisation over margin
- Profitability transparency is limited
Where it goes wrong
Revenues rely heavily on volume, while margins erode through inefficiencies in sales, delivery execution, underpricing, and weak price enforcement. Pricing power exists but is rarely applied confidently.
- Sales focused on securing volume, not margin
- Commercial negotiations driven by precedent, not value
- Limited tools to explain price differences
- Value framed around cost and effort, not outcome
- Sales decisions are not linked to profitability
- Pricing varies widely across similar customers or contracts
- Prices anchored to historical agreements
- Inflation and cost increases passed on too late or inconsistently
- Pricing not tied to value, nor to the size of the business
- Added value services not priced, or not at acceptable margin levels
- Customers get the same service levels
- No monetisation of different service levels
- Operational inefficiencies absorbed instead of priced
- Penalties and service levels not actively managed
- Cost to serve not visible and hence not priced
Price for value, not for volume
Strong production and heavy industry companies actively manage the link between pricing, utilisation, and profitability. They create transparency across the value chain and enable commercial decisions that reflect both operational reality and customer value.
- Pricing reflects true cost and delivered value
- Commercial decisions consider utilisation and margin
- Sales teams understand operational constraints
- Contracts are actively steered, not passively executed
- Leadership has clear visibility into profitability drivers
- Service levels are monetised, with clear visibility into cost to serve across customers and contracts