Most of finance is figuring out what to ignore. A $20M portfolio at 5x the profitability is what happens when you do.

Baxter Renal Care sold consumables and accessories alongside its dialysis devices — eighty-five distinct SKUs across the non-prescription portfolio, generating $20M in annual revenue. The portfolio had grown by accumulation: every customer request, every clinical preference, every regional variation eventually became a new line item. By the time I picked it up, the catalog was wide, the margin was uneven, and the operational tail — multiple suppliers, split shipments, inventory in the wrong places — was eating most of the contribution.

Take a portfolio that was working but underperforming, and figure out which parts were actually creating value. Then act on the answer.

The first decision was the hardest: cut from 85 SKUs to 18. We went line by line through the catalog and asked two questions — does this SKU exist for a real clinical reason, and does it earn its place economically. The answers eliminated 67 SKUs. Revenue still grew 6%, because the customers buying the dropped SKUs migrated to the products that stayed.

The supplier work came next. Consolidating to a smaller catalog gave us volume leverage we hadn’t had before. Renegotiated contracts reduced COGS by 30% across the rationalized portfolio.

The distribution piece was the operational one. The original model shipped non-prescription product separately, often to the same customers receiving regular device deliveries the same week. Cutting SKUs allowed us to stock all products locally and re-route the portfolio through Baxter’s existing fleet, co-delivering with the device shipments that were already going to those addresses. Shipping costs on the portfolio dropped 90%.

Each of those three moves — SKU cut, supplier renegotiation, distribution restructure — required different cross-functional coordination. The SKU work needed marketing and clinical sign-off on what could be retired. The supplier work needed procurement and legal. The distribution work needed supply chain and the field service organization. Three different sets of stakeholders, one decision sequence.

Portfolio profitability improved 5x. Total revenue grew 6% on a portfolio that was 79% smaller. The operational complexity drop — fewer suppliers, fewer shipments, fewer SKUs to forecast and stock — freed up resources that got redeployed into higher-value work elsewhere in the business.

Most product portfolios are doing the same thing this one was: subsidizing the work of a few SKUs with the operational cost of carrying a lot of others. The instinct when revenue is flat is to add lines. The discipline is to ask which lines you already have are actually earning their place.

The mechanics translate cleanly to services businesses, too. Most $15M–$50M services operators have a service catalog that grew the same way — accumulated, never pruned, with three or four offerings doing the real work and a dozen others creating cost without earning revenue. The exercise is identical: line by line, what’s actually clinical (or in services language, what’s actually strategic to the customer relationship), and what’s just there because someone asked for it once. The answer is usually the same — about 20% of the lines are doing 80% of the value, and you can cut the rest without losing the customer.

The harder lesson is the cross-functional one. The SKU decision was a marketing-and-clinical decision; the supplier savings were a procurement decision; the distribution savings were a supply-chain decision. None of them happened in finance. The finance role was sequencing them, making sure each decision’s economics were visible to the team making it, and keeping the program moving when any one workstream wanted to slow down. Strategic finance work, at this scale, is almost always sitting between the functions — not inside any of them.