Fit for Growth: A Guide to Strategic Cost Cutting, Restructuring, and Renewal by Plansky John & Caglar Deniz

Author:Plansky, John & Caglar, Deniz [Plansky, John]
Language: eng
Format: epub
ISBN: 9781119268536
Publisher: Wiley
Published: 2016-11-17T16:00:00+00:00

Rebalancing an Operating Model with Process Excellence

An agile, customer-driven innovation process was fueling rapid growth at a manufacturer of recreational vehicles. Unfortunately, its macro processes for delivery, marketing, and staff support couldn't keep pace with innovation, which rolled out new products in market-beating time and delivered “facelifts” to existing products faster than competitors.

The delivery macro process was emerging as a particular source of delay. The sourcing process within delivery couldn't meet its twin goals of capturing sustainable savings while ensuring adequate supply for the continuous stream of new products and facelifts flowing from the innovation machine. Although the company was working with suppliers to drive incremental improvements in strategic sourcing on a year-by-year basis, it hadn't taken on the bigger challenge of building a world-class delivery process. The time was ripe for a process excellence initiative to bring the delivery macro process up to the level of innovation.

Focusing on sourcing processes, the company built the capabilities necessary to feed innovation throughout the product lifecycle, while also accelerating material cost savings. A benchmarking exercise identified opportunities for “step-change” improvement in materials costs, which the company captured through internal cost-reduction initiatives and leveraging its scale with strategic suppliers. The company also fostered closer integration of delivery and innovation processes. Involving strategic sourcing earlier in product development gave it more lead time to deliver needed supplies, while cost modeling and supply economics analysis gave both innovation and sourcing teams a deeper understanding of product costs.

Process excellence enabled the company to deliver high-ROI results in the near term, while creating the conditions for sustained capabilities improvement and material cost savings. The broader macro process of delivery became more agile and responsive to changing customer requirements. Closer links between delivery and innovation enabled a reexamination of product features from a cost perspective, and triggered joint analysis to ensure market-back customer acceptance for cost-driven changes.

Ultimately, the company's delivery processes encompassed a sustainable end-to-end suite of capabilities, from the strategic to the transactional.

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