Reduction of operation cost
Quick response capability is required under today's ever changing external environment. In order to realize sustainable growth under such condition, it is highly recommended as management issue to carry out structural innovation on operation cost and organizational function..
We propose business innovation support using ABM（Activity Based Management）methodology. It breaks down a business process into the level of sub-process and activity; allocates manufacturing department's indirect cost, manufacturing support cost, indirect fix cost and variable cost to each activity and sub-process; evaluates each activity's business value according to a value measurement; and eventually ensures healthy margin after deducting unnecessary operation cost and process. Resource generated through deduction of business process is to be re-allocated effectively, strengthens organizational function and helps to make challenge for sustainable growth.
Service menu
Operation cost reduction
Client's profile or needs
This service focuses on reduction of indirect cost. By deeply analyzing indirect cost's structure, it realizes cost reduction which responds to below mentioned business needs:.
●Management issue
- It is necessary to achieve quick business performance recovery.
- Business needs to maintain performance and margin rate.
- It is necessary to improve relatively lower profit rate and higher cost structure than competitors.
●Project management issue
- It is necessary to execute cost reduction in short term.
- There is a limit to carry out cost reduction by self effort.
- It is difficult to hire additional resource for cost reduction project.
- It is hard to establish cost reduction methodology.
- Organization lacks necessary special knowledge and experience of accounting/finance, business process, information system for cost reduction, and difficult to find out opportunity for innovation.
Approach
ABM methodology's process re-design achieves cost reduction's goal and cost structure innovation based on analysis about current process and business value evaluation by process approach..
Benefit
This service aims: firstly to ensure profit rate by reducing operation cost, secondly to strengthen organizational function by re-allocating resources generated, through reducing unnecessary cot and process related to sub-process and activity, to core and strategic function. Eventually, this re-allocation enables real innovation effect to come true and to achieve sustainable growth.
