As boosting performance is a continuous necessity for companies, tackling fierce market competition, variability on sales and raw materials prices, and changing consumer expectations is becoming the “new normal”: Organizations must master their operating income to build flexibility and mitigate the impact of these external factors.
With the current challenging and unprecedented economic context, investigating performance levers has never been so vital:
- Various and uncertain demand requires to drive the break-even point down and encourages a variabilization of costs
- Complexity has risen overtime, and companies must be able to determine and manage it through complexity cost calculation
- The experience of more and more supplier inconsistencies raises the question of inventory management to ensure both cash balance and activity continuity
- Revisiting the organization increasing autonomy and more generally simplification will bring agility and additional benefits
- Never forget safety and the new mandatory sanitary measures that need to be implemented following the covid-19 crisis.
Two golden rules to achieve your targets
To address those stakes, BearingPoint has developed an innovative approach to improve performance, lying on two main principles:
Developing a zero-waste mindset
Waste hunting is a productivity basic which consist of identifying and reducing all type of wastes. Leaders should take it as a philosophy to be adopted by all stakeholders to secure the basics of operational excellence and preserve the 4 aspects of performance: safety, quality, costs, delays.
If all type of levers including digitalization, organization, internal complexity reduction must be investigated, it often appears that operational excellence basics levers account for 30 to 40% of total savings.
For more details on how to identify and reduce losses, see our dedicated article
Ensuring resilience through company-wide commitment
If top down guidance is necessary to set the ambition and create a sense of emergency, bottom up involvement in performance levers identification is essential because people on the field knows where problems are, and they are best placed to qualify performance levers.
Exceptional circumstances require innovative & people-centric approach
BearingPoint has developed a proven approach – the Booster Methodology – that enables to achieve tangible results and sustainable performance thanks to people empowerment. We use a 4-step sequencing that is key to provide all stakeholders with the required material and time to drive the most relevant roadmap:
- Two remote phases to prepare and allow time for analysis to ensure onsite effectiveness and mature decision making
- Two onsite visits punctuated by workshops to involve employees, and results presentations to secure managers’ commitment
This methodology has proved some specific advantages:
- The approach (phases duration, onsite visits) can be tailored to specificities
- The objective is to open all possible doors before looking at potential constraints (no taboos!)
- The standard method across entities enables to deliver a homogeneous consolidated roadmap
A worthwhile investment on both human and economic level
- The identification of all types of levers generates large scale savings for our clients in various industries: up to 15% of annual costs baseline for a food industry leader, 25% for a materials manufacturer. Studies have shown that traditional cost cutting approaches generates about 30% of projects savings during implementation. With our approach, and thanks to a strong involvement during the design phase, around 80% of estimated savings have been achieved.
- Our approach answers to cash management stakes and enables thoughtful project prioritization and realistic decisions about investment through ROI calculations and cash neutrality.
- The way to work as a joint team on our projects promotes ownership of the levers and roadmaps by managers which accelerates the implementation phase.
- Unlike top down cost cutting approaches that are generally a traumatic experience for the teams, the Booster Methodology enables to develop a positive performance improvement mindset and motivates managers to implement the levers.
Booster methodology requires a necessary time investment to raise questions and take decisions. Moreover, it showcases more reasonable savings than traditional cost cutting approaches, they are more likely to be achieved, which will help companies sustainably recover from the covid-19 crisis.
Authors : Ghada Aissa, Senior Manager