【正文】 e cost elements (“Peel the Onion”) and get down to cost drivers to determine appropriate action steps ?Action steps must be agreed upon and mitted to at all levels of the client anization 39 CU7122997KRA BDP Agenda ?The Best Demonstrated Practices (BDP) Concept ?Applications ?BDP Steps ?Client Example ?Key Takeaways 40 CU7122997KRA BDP Key Takeaways ?BDP is used to identify the best practices those leading to the most revenue at the least cost inside of or outside of a pany ?Internal BDPs can be done between anizations or against historical data. External BDPs can be done against direct petitors or against panies in a different industry. ?Internal BDPs are more straightforward to conduct than are external BDPs, but they tend to lead to less dramatic, though often significant, change BDP Overview BDP Steps Key Success Factors ?Key success factors include: understanding the client operations at a detailed level, looking at relevant internal and external parables, focusing on the most leveraged areas, gathering and analyzing data, obtaining mitment at all levels of the client anization, and municating clearly ?There are eight steps in doing a BDP: ?Select parable anizations for BDP ?Disaggregate anizations into major processes ?Construct firstcut BDP ?Construct adjusted BDP ?Quantify impact ?“Peel the Onion” in leveraged areas ?Develop an action plan ?Implement 41 CU7122997KRA BDP Takeaway Slides (1) BDP practices leading to the most revenue at the least cost Internal External Between anizations Historical Competitors Companies in different industries Internal and External BDPs Reasons for Better Performance BDP Steps Process Step Key Success Factors Select parable anizations for BDP Disaggregate anizations into major processes Construct firstcut BDP Construct adjusted BDP Quantify impact “ Peel the Onion” in leveraged areas Develop an action plan Implement ? Organizations should produce similar products/services under similar operating conditions ? Lay out major (35) processes ? Gather data ? Identify best practice anization for each process ? Adjust data for uncontrollable elements (., labor rates, product mix) to ensure an “applestoapples” parison ? Calculate potential impact (revenue increase or cost savings) by unit and by process ? Focus on anizations and processes with the most potential ? Determine drivers of differences at a more disaggregated level ? Set a BDP target ? Establish a detailed schedule ? Assign responsibilities ? Obtain mitment at all levels of the anization ? Communicate goals, deadlines and responsibilities ? Celebrate small successes along the way BDP Bar Chart Process C Process B Process A C B A C B A Company Z Company Y Company X Company X Company Y Company Z BDP $ $ $ $ $ $ $ $ $ Dollar per Unit ? More consolidated supply (VMRs) ? Lower cost raw materials ? Higher quality raw materials ? More parts outsourced ? More parts made in lowercost countries Products ? Simpler products ? Fewer product variations Plants ? Fewer, more highlyfocused plants ? More efficient production process (longer runs, less waste) ? Better equipment ? Better quality control Labor ? Longerterm contracts ? Better structured incentives ? Better supervisortolabor ratio Purchasing Manufacturing Distribution Selling ? Better delivery method (truck vs. train vs. airplane) ? More (or less) frequent deliveries ? Larger (or smaller) delivery sizes ? Better trained salesforce ? Larger salesforce ? Better anized salesforce (by region, by product, by industry) ? Better structured incentives 42 CU7122997KRA BDP Takeaway Slides (2) Adjusted BDP Priority Matrix Potential Impact Action Plan Unadjusted Adjusted Unadjusted Adjusted Unadjusted Adjusted Unadjusted Adjusted $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Dollars per Unit Company X Company Y Company Z BDP Unattainables Back burner High Low Low High Ability to Implement Impact Quick hits Top priority Step Impact Timing Responsibility $ $ $ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Process CProcess BProcess BProcess AProcess CProcess AComp any X Co m pan y Y C ompany Z$$$$0 . 00$0 . 05$0 . 10$0 . 15DollarsCBAZYXB y pr oces s By c om pan y$$$$$$Millions of DollarsTotal Impact Impact per Unit 43 CU7122997KRA