Cost Management Specialists commenced trading in 1993 as ‘manufacturers of profit’ with a revenue focus across the total budget. Since our humble beginnings we have transitioned to a focus on ROI, Profit & Sustainability driven by the following major factors:
1. Any fool can reduce cost. Many do without a strategic approach. Cost management invests in success rather than cost reduction where the solution can be worse than the initial problem e.g. CUB reducing Victoria Bitter alcohol content to save alcohol tax and losing significant market share.
2. Price per unit is a small part of the cost management equation. Volume, cashflow, inventory, waste, supply market and other significant cost management factors are important considerations.
3. Labour as a % of total cost required better workforce planning & labour management. Outsourced & off-shored options for higher productivity & increased ROI has reshaped workforces.
4. Internationally proven business improvement tools and techniques gained greater acceptance for their broader view of the value stream not just silos e.g. systems thinking, lean thinking, six sigma, constraints management, process excellence, digital.
5. The Internet of Things created greater opportunity across the global economy driving increased competition in local markets sometimes from external sometimes distant suppliers.
6. Digital transforms business models. Beyond process improvement or re-engineering, digital makes it possible to provide better customer experience to a broader market anytime, anywhere often at greater margin.
7. Mobile solutions, make the ‘invisible visible’ and the ‘impossible possible’ e.g. overcome physical constraints, business intelligence on chargeable hours to improve productivity and cashflow.
Cost Management Specialists, as a learning organisation, created a focus on ROI as the pathway to profit. Sustainable performance improvement is reliant on staff engagement whereas profit has major appeal to owners but not necessarily other stakeholders.
All key stakeholders have a vested interest in ROI:
- Clients through their customer experience and perception of value.
- Staff through skills development and professional experience.
- Suppliers through a streamlined supply chain & greater confidence that they will be paid.
Our Find the Hidden Profit projects have become Leveraging ROI projects to facilitate greater stakeholder engagement, embrace diverse views and deliver sustainable cost management solutions.
Leveraging ROI projects conceptualise options to make ‘the whole’ greater than ‘the sum of the parts’. Project scope can be ‘whole of enterprise’ or a process within the value stream.
Leveraging ROI projects facilitate cross-functional collaboration canvassing options to identify a preferred option. They make strategy operational through ROI teams committed to specific, measurable & timely outcomes.
Benefits from a Leveraging ROI Project are ongoing. Staff learning and enhanced performance improvement capability drive continuous improvement increasing ROI.
Click on the process map above to clarify how the benefits of a Leveraging ROI Project can deliver ROI, profit and financial sustainability.
If you want insight and support to transform intention to better results – a major challenge you probably face every working day – contact John Cleary on +61 411 522 521.