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Robust Production Management (RPM) Module 12: Selecting Viable Project Candidates
 

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This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/robust-production-management-rpm-module-12-selecting-viable-project-candidates-470


It's so sad to see companies waste money, time and resources on lean & six sigma programs that yield virtually no ROI from their respective projects. Hint: not every project candidate is a financially VIABLE one. When company managers select projects that reduce operating costs, companies can then reduce prices to customers, leading to increased profit margins on each unit sale. With reduced customer prices in place, companies have a better chance of selling more units, and taking market share away from competitors. Robust Production Management (RPM) Module 12 "Selecting Viable Project Candidates" outlines the profit-generating process pretty well - and page 7 diagrams the concept in its entirety. Give it a try - it worked for Dale Carnegie and Henry Ford! "Selecting Viable Project Candidates" is the twelfth module in the Metrilogics Robust Production Management (RPM) training series - more on the way.

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Robust Production Management (RPM) Module 12: Selecting Viable Project Candidates Presentation Transcript

  • 1. Copyright © 2005 Metrilogics, LLC. All rights reserved. Robust Production Management Metrilogics Front-line controls for bottom-line savings. TM SM Module 12: Selecting Viable Project Candidates By Lance Latham Senior Managing Partner
  • 2. Copyright © 2005 Metrilogics, LLC. All rights reserved. Metrilogics TM Business 101 Revisited The primary goal of any for-profit business is to... This is accomplished by: maximize profit. Operating Cost $Dollars$ Profit Operating Cost Before After Profit Revenue v Increasing revenue v Reducing operating costs 2 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/robust-production-management-rpm-module-12-selecting-viable-project-candidates-470
  • 3. Copyright © 2005 Metrilogics, LLC. All rights reserved. Metrilogics TM Project Candidates That Reduce Operating Costs (cont.) Cost Categories Profit-Building Project Candidates That Deliver Cost Saving Results • Reduce production scrap • Reduce regulatory fees • Link team member incentives to improvements in performance (quality + productivity) • Optimize office & warehouse space • Schedule system & equipment maintenance to occur during non-production times • Optimize team productivity • Establish challenging & achievable performance standards for individual team members • Negotiate & establish vendor price discounts • Optimize economic re-order points Salaries / Benefits Energy / Utilities Facilities Equipment Materials Taxes / Regulatory • Reduce regulatory fines • Minimize changeover & set-up durations • Modify work station layout to facilitate work flow • Establish method to bill back vendors for low-quality materials received • Negotiate & establish vendor price discounts• Identify & eliminate energy waste • Minimize overtime costs • Reduce taxes • Maximize first-pass process output quality & accuracy 5 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/robust-production-management-rpm-module-12-selecting-viable-project-candidates-470
  • 4. Copyright © 2005 Metrilogics, LLC. All rights reserved. Metrilogics TM Module 12 Summary v The primary mission of any for-profit business is to maximize profit. v Profit is maximized through a combination of increasing revenue and reducing operating costs. v Projects should only be embarked upon if they will result in the realization of tangible, bottom-line benefits upon their conclusion. v Operating costs for most for-profit companies can be broken out into 6 major categories, with Salaries / Benefits representing the largest share (≈ 45%) of a given company’s annual total. v Projects that result in revenue growth can take a variety of forms, beyond simply finding ways to “…sell more product!” v In practice profitability will be driven first through cost reduction projects (in the short term), but will then increase through revenue growth initiatives (in the intermediate and long terms). 8 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/robust-production-management-rpm-module-12-selecting-viable-project-candidates-470
  • 5. 1 Flevy (www.flevy.com) is the marketplace for premium documents. These documents can range from Business Frameworks to Financial Models to PowerPoint Templates. Flevy was founded under the principle that companies waste a lot of time and money recreating the same foundational business documents. Our vision is for Flevy to become a comprehensive knowledge base of business documents. All organizations, from startups to large enterprises, can use Flevy— whether it's to jumpstart projects, to find reference or comparison materials, or just to learn. Contact Us Please contact us with any questions you may have about our company. • General Inquiries support@flevy.com • Media/PR press@flevy.com • Billing billing@flevy.com