Case Study – Circa 2010-2020 Timeframe
Cost Reduction- Success Story
BUSINESS TRANSFORMATION - Case Study
Cost Savings Initiatives
Investments in New capital types of equipment.
Lower costs structure
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- Client – Global top 2 in the industry.Industry – Industrial products.
- Geography – Australia and New Zealand.
- SCM Specialization –SCM thorough review.
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- The client’s supply chain costs were significantly above the norm.
- There were several isolated projects for cost reduction which needed to be cohesively weaved into a single program with a common purpose.
- A stretch target of $18M cost reduction over 3 years.
- Inventories were too high, while other products suffered from stockouts.
- Some projects in this wave are close to ‘kick-off’; these have been discussed for a long time and need to be brought to fruition quickly in order to gain credibility for the complete program. Potential to achieve significant supply chain improvements by implementing projects with a high relative business benefit.
- Projects with a higher level of difficulty and possibly higher risk. Implementation of projects in Wave A will help strengthen implementation methodology which can be applied to the implementation of these projects.
- The low relative benefit with medium implementation difficulty, therefore, does not justify immediate priority.
The team identified a series of initiatives for capturing the savings
- 3 years target Savings= $18 Millions.
- 18 months actual savings= $25 Millions.
- Projects Costs= $330k.