A case analysis on the invisible profit in liquor manufacturing industry

Operating profit is being derived by subtracting expenses from goods sold or services rendered to customer. The available financial data do not capture the performance issues for today's manufacturing environment. Manufacturing managers are more perplexed to read the company income statement at the end of year which shows loss even where higher volume of production and sales have been achieved. Since no framework is available to analyse how profit is being distributed among the various activities that form an industry's operation value chain, they are not fully aware of the real cost implication. This can be achieved by having a clear vision into cost drivers and establishing sound linkages between operational and financial data. A study conducted in a leading liquor manufacturing industry presents implementation of business process reengineering and has improved its profitability and has helped to link critical operational data across its value chain with financial statement.