Scarcely any industry or company has been untouched by the most recent global recession and its long-running aftermath. Most companies have already realized the “easy wins” in reducing costs. Profitability pressures are relentless, however, and operational leaders are being asked to dig deeper to improve margins. In many cases, the path to greater profitability requires an analysis and improved alignment of customer demand, products and services, supply sources, labor costs, talent, energy costs and tax regimes. But how can these factors be aligned to improve the bottom line?
Despite the inherent complexity, higher profitability is achievable. When every element of direct and SG&A expense gets a fresh look through these lenses and across a long-term planning horizon, the conclusions can be surprising, and they may challenge conventional wisdom. Breakthroughs may involve reconfigured product portfolios, channels, supply chains, suppliers and operating footprints. The overriding goal is improved customer value and lower costs for sustainable results.