Margin control for manufacturers.
Raw material costs can change by the day. Your price list, plan and hedges change far less often. Vadar Alpha connects all three to today's market, so each decision protects the margin you planned.
Procurement buys at the best price it can find. Plants run to a standard cost. Sales prices to win. Each team does its job, but one raw material price move hits all of them at once, and margin slips between them because each team sees only its part.
Metals, resins, energy and ingredients can move faster than an annual budget assumes.
End markets resist price increases, so a cost increase lands on margin first.
Buying, making and selling are planned apart, so their combined effect on margin shows up late.
Steel, paper and packaging makers sell a product priced by a market, so a move can squeeze both sides of the margin at once.
Vadar Alpha prices each decision against the same market data, so procurement, plants, sales and risk work from one picture of margin. Each decision gets a target and a range it should stay within.
| Plan | Without | With Vadar Alpha | Tolerance (low) | Tolerance (high) | |
|---|---|---|---|---|---|
| Jan | 22% | 22% | 22% | 21% | 23% |
| Feb | 22% | 21% | 22% | 21% | 23% |
| Mar | 22% | 20% | 21% | 21% | 23% |
| Apr | 22% | 18% | 21% | 21% | 23% |
| May | 22% | 19% | 22% | 21% | 23% |
| Jun | 22% | 21% | 22% | 21% | 23% |
| Jul | 22% | 22% | 23% | 21% | 23% |
| Aug | 22% | 20% | 22% | 21% | 23% |
| Sep | 22% | 19% | 22% | 21% | 23% |
| Oct | 22% | 18% | 21% | 21% | 23% |
| Nov | 22% | 19% | 22% | 21% | 23% |
| Dec | 22% | 20% | 22% | 21% | 23% |
We read your ERP, plant and contract data where it already lives.
Purchases, production runs, quotes and hedges are each priced against today's market, with a target and a range.
Each team gets its instructions. We score the results against a baseline your finance team agrees on.
| Margin gain | |
|---|---|
| Buy | $620K |
| Make | $480K |
| Sell | $710K |
| Risk | $390K |
Each gain is scored against a baseline your finance team agrees on before we start, and tied to the decision that produced it. We count each dollar once.
Margin management means treating margin as one number that every team affects, and managing it against the live market rather than the annual budget.
Procurement is measured on purchase price, plants on cost per unit, sales on revenue and risk on hedge results. Each measure makes sense alone. But a single raw material move touches all four, and the margin lost between them belongs to nobody. That is where most leakage hides.
Vadar Alpha prices every purchase, production run, quote and hedge against the same live market data. Each team keeps its own work and tools, but all of them see how their decisions add up to the year's earnings.
Every decision gets a target and a tolerance. When the market moves past a tolerance, the owner gets a plain instruction with the dollars at stake and the point at which it stops paying. Inside tolerance, nobody is interrupted.
Results are read from your own systems and measured against a baseline your finance team agrees on before we start. Each dollar is counted once, so the gains add up to the margin finance reports.
A steel or metals producer earns the spread between its selling price and the cost of scrap, iron ore and energy. Both sides follow markets, often on different calendars. Vadar Alpha prices each order and each raw material purchase against that spread, so a quote never sells below what it costs to replace the metal.
Containerboard and paper follow recycled fiber, pulp and energy. Plastic packaging follows resin. Customer prices often reset on an index months later. Vadar Alpha prices fiber, resin and energy purchases against the market and shows when an index reset will or will not recover the cost.
Every decision arrives as a plain instruction, with the dollars at stake, the reason, and the point at which it stops paying.
Measured asMargin lost between the margin you planned and the margin you earn. It comes from cost increases passed on late, discounts given without a margin check, standard costs that are out of date, and price risk left unhedged. Vadar Alpha finds it decision by decision and puts a dollar value on each.
By pricing buying, production, pricing and hedging against the same market data, with a target for each decision. Then one price move is answered across the business, not one team at a time.
Each decision has a target and a range it should stay within. When the market moves outside that range, the owner gets a plain instruction with the dollars at stake and the point at which it stops paying. Inside the range, the team is left to get on with its work.
Companies with large input costs, volatile prices and volumes, thin margins and competitive end markets, where costs are hard to pass on. We start with one decision and show its value on your own data in days.
Yes. A steel maker's margin is its selling price minus scrap, iron ore and energy. A packaging maker's is its selling price minus recycled fiber, pulp, resin and energy. Vadar Alpha prices both sides of that spread against the market, so each order and each purchase shows its margin before you commit.
A 30 minute conversation to see where your margin leaks and whether we can help.
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