Most people do not know that poor asset utilisation is the biggest cause of profit problems in firms. This presentation analyses asset utilisation

1. Asset Utilisation B.2.6.
Creating and Presenting Strategic Plans

2. •The biggest cause of profit problems in all firms
•A major driver of Internet transformed businesses
Poor Asset Utilisation

3. 0
10
20
30
40
50
100
150200
40
28
20 18
8
ROCE(%)
Investment/Value Added (%)
How Fixed Investments Can Kill Profits

4. 0.0
7.0
14.0
21.0
28.0
62
72
81
90
15
21
22
25
28
ROCE(%)
Capacity Utliisation
How Great Capacity Utilisation Boosts Profits

5. 0.0
6.5
13.0
19.5
26.0
62
72
81
90
19
20
24 24
26ROCE(%)
Value Added/Employees (%)
Personal Productivity Boosts Profits

6. 23 29 37
20 19 25
7 10 15
Investment/
Value Added
Value added/Employee
Low High25% 60%
High
Low
-10%
10%
ROC
E(%)
High Productivity Cures Investment Intensity
Implication?

7. Poor capacity utilisation:
Solution: use 24/7 - Internet universities
Poor personal productivity:
Solution: relentless drives - Internet agglomeration
Very high spend on buildings and equipment:
Solution: rent don’t buy - Use Internet - Cloud
Poor Asset Utilisation: Causes and Solutions

8. Year 201X 201Y 201Z % change Strategy
Plant & Equip
Sales/Total Assets
Number employees
Sales/Employees
Capacity utilisation
Measuring Asset Utilisation

9. The End

10. The End

11. Competitive position
Asset utilisation
Investment intensity: lowest
Productivity, people + assets: # 1
Fixed Vs Liquid assets: lowest
Capacity utilisation: # 1
Markets addressed
Leadership