Profitect
Profitect, Inc., is a Software company located in Waltham, Massachusetts, providing solutions to retailers with the end goal of increasing the client's overall profit margin. Originating out of Israel, Profitect employs a unique software platform, designed to provide solutions for increasing revenue and reducing cost. The software is used throughout the entire retail value chain, in order to identify trends and patterns associated with areas of leaking profit, including shrink, damage, costing errors, waste, process errors, and more. They are able to provide retailers with an automatic, targeted set of instructions in order to reclaim the existing untapped profit opportunities. Their "profit amplification" suite consists of five modules, including procurement, logistics & warehouse, delivery & receiving, inventory, and point of sale.
History
Traditional "profit optimization" tends to include methods of reducing pricing, promotional, and markdown losses. At the time they were founded in 2007, Profitect's techniques were relatively new and innovative, as they instead look to improve profits through cost reduction, by searching and identifying gaps in the retailer's current practices. Profitect received its first round of financing, in the form of $3 million, from venture capitalist firm Cedar Fund in 2005. In 2009, Profitect announced a second round of financing in the form of $5.5 million, led by both Cedar Fund and Genesis Partners. After hiring CEO Guy Yehiav in 2010, the decision was made to officially enter the U.S. market, and Profitect established its current headquarters in Waltham, Massachusetts.
Profitect opened an office in the United Kingdom in 2011 in order to better serve their expanding number of European clients. Shortly following the addition of the UK office, the company decided to move its research and development operations away from Israel to their Massachusetts headquarters. With this move came the expansion in size of the Waltham office, from 4,000 to 8,000 square feet, in order to "more effectively meet the needs of our growing customer base and [to] bring our research and development team together under one roof", according to CEO Guy Yehiav. Some of Profitect's clients include UK retailers like Morrisons and Marks & Spencer, as well as Yellow Convenient Stores (a subsidiary of Paz Oil Company) of Israel, Woolworths of South Africa, and American retailer Abercrombie & Fitch.
Product
Profitect's software solution aims to increase the "profit wedge", helping clients increase revenue and reduce costs. Each module utilizes algorithms to identify trends of profit leaks from shrink, waste, inventory distortion, or returns, for example, followed by a list of prioritized opportunities coupled with actionable solutions to stop the leaking profit and increase revenue.
The Profitect Suite is divided into five modules:
- Procurement
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- The Procurement module monitors buyers and vendors' performance and flags critical points that may represent erred buying decisions, fraud, supplier favoring, non-compliance, or buyers' error.
- Logistics & Warehouse
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- The Logistics & Warehouse module monitors processes in the areas of the DC's, warehouses, shipping and logistics in order to enable the retailer to implement tighter controls over the supply chain.
- Delivery & Receiving
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- The Delivery & Receiving module analyzes transactions taking place between the store's back door interface with the warehouse, distribution centers (DC's), Direct Store Delivery (DSD) suppliers, and between the stores and other stores, by correlating receiving, transfers and returns data with sales and inventory levels.
- Inventory
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- The Inventory module automatically detects and alerts management on loss-triggering events and actions based on store inventory data, STOCK adjustments, and waste registration.
- Point of Sale
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- The Point of Sale module analyzes all cashier and POS transaction data and highlights areas that can be improved due to compliance issues, fraud, lack of training, or process failures.