A performance improvement is a focused change initiative to serve this purpose by enhancing productivity and efficiency. The change initiative normally affects one or more functions in the organization. Although these initiatives are not transformational in their nature, they are important keys to drive evolutionary change.
There are many types of performance improvement initiatives. Typical initiative objectives are margin enhancements, efficiency improvement, increased asset utilization or cost reductions. Performance improvement for us means optimizing an organization’s existing assets and way of working.
I have been working with a manufacturing client that had enjoyed global growth over several years. The strategy was built on a customer intimacy approach whilst targeting a small niche in the market requiring high flexibility. However, the strategy of being flexible with high service and short lead times led to higher than desirable stock value. The client turned to Ascend to identify opportunities to reduce inventory to support further investments.
The Ascend team analyzed the client’s position from both an inventory and operation perspective, identifying a significant potential to lower total stock value. The solution addressed both reduction of supply chain risk and the opportunity to free capital. In summary, the recommendations were to implement global purchasing guidelines, change focus from unit price to total cost of ownership and to review current suppliers.
Daniel Eriksson, Ascend