Logistics Capital & Strategy Powers its ‘What if’ Scenario Analysis with Quantrix
“Quantrix is a core part of our ability to deliver these solutions – it is the killer tool”
It’s easy to transport goods from point A to point B, but finding the most profitable way to do so is hard. Logistics Capital & Strategy (LogCapStrat) provides financial advisory and strategic consulting services in the complex transportation and logistics industry. Its clients range from middle market transportation companies to some of the largest, most sophisticated private equity firms in the world. LogCapStrat works with its clients to solve problems that range from mapping out value drivers and building profitable growth strategies, to merger-and-acquisition advice and due diligence assessments. The Washington, DC-based company specializes in supply-chain-intensive industries that require analysis and modeling of large amounts of data with multiple views and often across many ‘what if’ scenarios. Discovering value and opportunity in these complex industries is what sets LogCapStrat apart from its competitors, and Quantrix Modeler has become an important tool in that process.
Large data sets are common in LogCapStrat’s work, and it recently used Quantrix to build a model based on an SQL database with more than 20 million records. The project involved fusing together data from multiple sources to create a multi-dimensional model for the business unit and its market. Using the DataNav component in Quantrix, LogCapStrat was able to bring together the internal financial data, customer data, competitive pricing and trade statistics required to form a comprehensive assessment of the opportunity. The trade data alone involved over a dozen dimensions including origin and destination points, mode of transport, international border crossings, time, weight, number of shipments, and revenue. Modeling that amount of data in multiple dimensions can be extremely challenging in an SQL environment, requiring significant programming time, and multiple iterations to achieve the results the business analysts need.
“Database analysts don’t always have time to understand the problem we’re trying to solve, and business people don’t know how to program,” says Richard Holohan, a Partner at Logistics Capital & Strategy. “With Quantrix, you can get up and running on big sets of data in a very fast manner. Business analysts can manipulate the data without teams of programmers.“
LogCapStrat also uses Quantrix in its financial advisory practice. In one recent assignment, a large private equity client engaged LogCapStrat to help it evaluate a major investment in the distressed securities of a large transportation company near bankruptcy. The customer wanted a highly detailed financial model with the ability to generate multiple scenarios at a very granular level, and within a short time frame in order to capitalize on the opportunity. “Quantrix was custom built for this,” says Holohan. “We were able to easily add a dimension with multiple scenarios that repopulated the entire model – we would have needed a huge team and lots of time and expense to do that in Excel.” Based on the insightful information that LogCapStrat provided via Quantrix, the customer was able to get comfortable with the risks involved, and made a substantial, and very profitable investment.
Quantrix has the ability to present data in visual formats which is also important to LogCapStrat. One client was trying to break into a specific transportation market, and needed to assess its competitive position relative to other offerings. LogCapStrat built a model capable of handling hundreds of shipping lanes that included competitor offerings by price, mode of transport, service requirements and other factors. Using Quantrix, it created a scatter plot for each lane to provide an easy-to-understand visual representation of the competitive landscape. “We could easily identify, by lane, the area where there was a competitive hole that our client could exploit,” says Holohan. “It was very effective. You can sit in front of someone all day long with spreadsheets, and it doesn’t have the same impact.”
While visualization is important, Holohan points out that the ability to model the data is the key. “With Quantrix we can model data, insert assumptions, and look at the effect of those assumptions. We can make changes on the fly, and see the impact,” says Holohan. “You can’t do that with visualization tools alone.”
Holohan also appreciates Quantrix’s ability to put modeling power into the business analysts’ hands. While the company has highly skilled SQL programmers, they are often in high demand. “Quantrix allows us to do things that we’d normally need a much larger staff to do,” says Holohan. “Quantrix enables us to leverage our experts more effectively.”
For LogCapStrat, Quantrix has enabled it to provide detailed, insightful solutions to clients in a fast-paced, extremely competitive, and data-intensive environment. “Quantrix is a core part of our ability to deliver these solutions – it is the killer tool,” says Holohan. “We could not have reached the same answers without dramatically more effort. Given the time constraints, we wouldn’t even have attempted it.”