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Cost Reduction

For many businesses today, the magnitude and speed of cost reduction required exceeds what their lean program can deliver.

It is generally not a good idea to bring a knife to a gunfight.

Because the level of competition a business experiences will only increase over time, Lean is commonly implemented as “the answer” to achieving critical near-term cost reduction targets. Just one problem exists… more frequently than not, the amount of cost reduction required goes far beyond the costs driven by the value stream.

In these cases, the entire business model needs to be evaluated for cost reduction opportunities. That’s where Productivity’s Breakthrough Cost Reduction Process can be helpful.

Breakthrough Cost Reduction Process in 10 Steps.

With our Breakthrough Cost Reduction Process, we work with your client management team in systematically applying our 10-step process to strategically evaluate ALL the opportunities to dramatically reduce costs… quickly.

Past applications of our process have resulted in irresistible business cases for:

  • Facility consolidation.
  • The innovative application of automation.
  • Warehouse consolidation.
  • Restructuring end-to-end flows based on defined product families and tightly integrated value streams.

This proven effective approach ensures cost reduction decisions will not adversely affect the organization’s ability to remain flexible and grow in the future.

If your company’s operational strategy includes an urgent short-term need to reduce costs, we are ready to assist. Give us a call to schedule your Breakthrough Cost Reduction project and further assure the future of your business.


Case Study

Overall Cost Containment

Company: Leading Producer of Plastic and Metal Packaging

Engagement: 3 years

Objective: Manufacturing cost containment. Reduce cost of goods sold by 20% with resulting capabilities to sustain the gains. 2 facilities.

Approach:

  • Current state diagnosis, design and execution of a lean conversion plan with milestones
  • Lean awareness seminars and educational events for critical mass
  • Lean tool kit training and flow implementation
  • Total Productive Maintenance plan and execution for key equipment and stores
  • Coaching and mentoring throughout the conversion process

Outcome:

  • Achieved cost of goods reduction target in the first 12 months
  • key equipment OEE up >25%
  • set-up time reduction ~65%
  • positioned a visual factory
  • critical mass trained in cause-and-effect problem solving (process variation reduction)

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