Cost Management
Rapid Cost Reduction
During times of economic uncertainties, companies typically have two fundamental choices; “hunker down” in a mode of survival or strengthen their strategic position. Experience shows that companies that outperformed their industries on the basis of return on invested capital (“ROIC”) adopted strategies to improve their position in the marketplace during challenging times. They adopted an “and” strategy not an “either/or” direction. They built sustainable value for their company and stakeholders, in part through implementing rapid cost reductions where their costs were not competitive. MainStream developed the “Rapid Cost Reduction” (RCR) program to give organizations a pragmatic process to quickly shed non-value added costs and thus allow for long-term operational excellence.
The MainStream RCR process begins with a diagnostically thorough assessment that quantifies opportunities and identifies risks. Immediately thereafter, the rapid cash creation phase begins by focusing on high-value targets first, working with the supply chain, rationalizing collateral spending and streamlining redundant or non-value added activities. The second phase focuses on shaping sustainable processes, developing operating advantages and implementing new metrics.
Our teams background in operational improvement with deep industry knowledge and experience and know where to look for improvements. We hit the ground running and our hands on approach drives short term results and long term value for company owners.
Strategic Sourcing
Managing organizational costs through a strategic sourcing process allows MainStream to utilize our experience and knowledge of the supply industry to best realize sustainable and economic advantages for customers. Our process develops a secure and responsive supplier base with the capability of providing on-time, high quality, low cost goods and services to meet the existing and prospective business needs of our clients.
At MainStream we do not assume to have the same level of knowledge of your needs that you do. It is why our approach is to partner with our clients to take advantage of our mutual knowledge covering the essential elements of what is needed and what the best sourcing options are in the marketplace.
Our process begins by benchmarking and analyzing your current spending on a comparative basis to the marketplace. Our team carefully completes a supplier identification and qualification process while simultaneously moving quickly through the strategic sourcing process of negotiating with suppliers to reduce costs and enhance the contractual terms and conditions.
Our objective is to quickly guide our clients with a lower cost point and provide the organization with opportunities to improve margins, become more competitive in the marketplace and enjoy strong relationships with quality suppliers now and in the future.
Our services can be provided on a fixed fee plan or on the basis of sharing the gain driven by actual cost savings. Under either framework, clients are provided with the highest level of personal attention and care possible.
Manufacturing Footprint Optimization
The current downturn has many organizations pursuing revenue growth or cost reduction goals. While both are worthy objectives, many companies would receive equal or greater benefit by altering their operational footprint. Manufacturing footprint optimization and on a more global scale, enterprise footprint optimization deals with how the “pieces” of an organization should fit together. This process-oriented approach prompts organizations to adopt a more strategic and holistic approach to optimization as it relates to how and where their assets are deployed. In spite of that, many companies continue to rely on a traditional, narrowly focused approach favoring swift action over thorough consideration. Bringing footprint issues to the forefront allows for sharp relief covering a variety of business cost related issues.
Optimizing a company's footprint improves operating flexibility and positions the organization for future growth. The optimization process balances a wide range of critical factors including improved operating requirements, increased cost efficiency and access to new markets. A narrow focus on only cost reduction does not allow a company to capture the broad range of value improvement opportunities.
Footprint optimization, whether completed on a manufacturing or global scale, is relevant throughout every industry and at any point during economic and business cycles. Organizations need to regularly optimize their footprint to ensure their long-term competitiveness.
Office and Manufacturing Business Process Improvement
Over the past 10-20 years, manufacturing companies have successfully focused on productivity improvements on the shop floor. This increase in operational efficiency generated increased cash flow and enterprise value to business owners. However, one of the empirical findings of that era is that on average only 20% - 40% of non-value-added costs in a company are production related. With business processes in the office accounting for up to 80% of the improvement availability, there is a great opportunity to improve profitability, productivity, customer satisfaction and employee morale, while at the same time lower costs.
At MainStream we have been working with a broad range of middle market companies for years to guide these organizations through the business improvement process. Generally our engagements begin when an organization identifies a "e;burning"e; platform. Over the years that burning platform has included the following challenges:
Taking too long to respond to client or prospect request for proposals;
Slow invoicing of products and services provided to clients;
Inaccurate invoicing of products and services provided to clients.
Our approach is to work carefully with our clients as they address these issues as well as those related to a product development cycle that takes too long or a delivery system where products don’t reach clients in a timely manner. MainStream has the experience and knowledge to help get your organization moving in the right direction.