As we all know, many companies are responding to
today’s economic climate by executing a variety of profit improvement programs
designed to reduce costs and increase productivity.
However, we believe that many of these programs
would be so much more effective if they were designed to be more strategic in
nature. Examples of this are:
1.
Scope of the
projects for cost reduction should be broader: generally, the targets of
many of these projects are people reduction; and the usual overhead expense
items. While these can provide saving for the company, our experience finds
that greater additional savings may be found in improving processes; implementing new technologies, and better sourcing
approaches. Even greater savings result when you integrate the four
(people, process, technology, and sourcing).
2. Implementing
an ongoing profit improvement program rather than a special project: Companies
who have been effective in controlling their costs over a long period of time
know that these profit improvement programs are not “special projects”. They
are “ongoing programs”. These programs require continuous efforts to keep the
savings and to continue to identify additional savings over time.
Companies that have addressed the integration of
people, processes, technology, and sourcing and then correlated them into their
business have seen these significant profit improvements in their operations.
Examples include:
·
Rationalization of processes and eliminate
redundancies by merging processes;
·
Technology rationalization and level of
automation existing versus actually needed;
·
Analyzed company procurement and sourcing.
Evaluated shortening company supply chain.
Please
contact us if you would like to discuss this or any of our other topics
further.
Joseph Bonocore
No comments:
Post a Comment