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Assign Clear Personal Responsibility For Each Cost Line To A Single Individual of Supply Chain Business

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Assign Clear Personal Responsibility For Each Cost Line To A Single Individual of Supply Chain Business

About Individual of Supply Chain Business

By Doug Hudgeon

The Cost Management Tiphudgeon12 As I’ve planned my upcoming tips, I’ve been pondering which tip will be the most important. I now think this is it.

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You cannot reduce cost in your organisation unless you assign a single person the task of, and regularly hold them to account for, improving each cost line – and if you have to change your chart of accounts to do so then do it.

Who you select as the responsible person for each cost line will depend on what you want to accomplish.

If your cost reduction programme is urgent and necessary for your corporate survival, you should assign responsibility to a small group within Finance who are solely focused on taking cost out of your organization.

However, if you are looking to improve operating efficiency as an ongoing practice within your organization, you should assign responsibility to front line managers.

Building a cost conscious culture requires empowering your managers to impact cost and valuing their success at doing so.

Your managers must see themselves as personally responsible for cost reduction. Related web sources The bystander effect is well researched social psychology phenomenon.

It was first studied following the killing Kitty Genovese in 1964 where her neighbours failed to intervene in her murder because they thought that someone else would.

Whist this interpretation of that incident is probably flawed, you don’t want your company to die because your managers were all bystanders.

Doug Hudgeon who is lawyer and vendor management professional who has branched into finance and accounting shared services management.

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ABOUT THE PRINCIPAL AUTHOR

Today, Vivek and his partners are among 20-30 people on the planet earth who have this deep understanding of supply chain systems, practices and tools. CEOs, COOs, executives and Boards call them in most challenging situations once they know the full potential of supply chain based transformations. Following are key milestones in Vivek's journey:

  • Started in 1983 as a merchant navy cadet at 18 years age, worked his way to qualify as a Captain – qualified to take command of any merchant ship, worldwide.
  • Earned a top tier MBA from UNSW at the top of his class.
  • Joined highly regarded strategy consulting firm Booz Allen & Hamilton, consulting to the CEOs, Boards and senior management of global corporations within Australia.
  • To learn and specialise in supply chain – against all odds, sought out the co-inventor of supply chain in Germany and convinced him to be a partner in his firm, GLOBAL SUPPLY CHAIN GROUP, launched in January 2000.
  • More than 500 successful blue chip projects with high impact business transformations in large corporations using the full power of SUPPLY CHAIN MANAGEMENT.
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OUTPERFORM OUTSOURCE OUTPROFIT

The trend of outsourcing continues to grow unabated with the whole gamut of services, from simple to mission-critical tasks. There is not a single company on earth that does not outsource anything. It is not just about cost arbitrage, it is also a finer expression of division of labour at the organisational level. Like all leverage, outsourcing is a double-edged sword too. On one hand, it allows you to do more, faster. On the other hand, if it goes bad, it can easily kill your business. If you do not believe that is possible – you can google the Fox Meyer saga from the 90s and see for yourself.

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UNCHAIN YOUR CORPORATION

Businesses Are Chained By Unseen Chains. If You Are Looking For Ways To “Unchain Your Corporation” A Successful Business Transformation Is Required.

Successful Business Transformations Are Difficult, Yet Rewarding.

Business Transformation Is Fast Becoming A Question Of Survival In The Modern Globalised Era.

Modern Supply Chains Integrate Businesses And Economies Faster By Systematic Information Sharing From Internal And External Sources.

Companies Can Multiply Profits By Progressively Ramping Up Cohesion And Collaboration Of All Moving Parts In B2B Network To Achieve Tighter Integration.

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GREEN SUPPLY CHAIN – AN ACTION MANIFESTO

It is generally accepted that environmental consciousness is now changing to environmental proactiveness as organizations are discovering that it makes good commercial sense.

Boards are asking the management to review their policies related to environmental norms, not only to bolster their corporate social responsibility aims, but also because consumers are asking for greener supply chains

It is also widely agreed that consumers will increasingly prefer to buy more and even pay more for products or services provided in an environmentally sound manner.

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