Operations

ASSET OPTIMIZATION

Global competition has inspired new levels of efficiency as organizations seek ways to manage cost and use resources wisely. For many, off shoring and outsourcing is not an option. For others, the best solution is to improve operations both here and abroad—and to expect similar improvements within suppliers’ operations.

The challenge for every organization is to focus scarce resources in a way that gets the best return—now and in the future. The KT approach to asset optimization is to diagnose specific actions that will improve the way assets are allocated and used. We collaborate with clients to identify opportunities for improved profitability and growth by addressing these areas:

Strategy: Every organization and function needs a strategic framework that serves as the context for all activities, defining what you will and will not do as an organization. If organizational activity is off-strategy, resources are not being focused on the products, customers and markets that support your strategic goals. The corporate strategy must be revisited regularly to ensure relevance and it must be effectively implemented within a strategic timeframe.

More about Strategy Formulation and Implementation. 

True Cost: Determining the relative value of a range of activities ensures that your organization is focusing on those activities that add significant value to the business, and removing those activities that consume significant time and effort yet yield limited value. For example, low volume manufacturing, faulty organizational performance and reward systems, and weak standard cost systems can disguise the true costs of bringing your products to market or serving your customers.

Managing Complexity: We refer to an excessive number of low value activities as complexity. Low value activities have a disproportionate cost/value relationship, and are responsible for a significant portion of a company’s overhead, or cost structure, but generate little, if any, profit. The presence of these low value added activities within an organization is one of the driving forces of operational inefficiencies and excess cost. Kepner-Tregoe helps organizations identify and manage complexity to refocus resources on high-value products, customers, and markets.

More about true cost and complexity:

Complexity, the Silent Killer

When low cost offshore manufacturing beckons… Stop! The game isn’t over here yet.