A crucial business process was simply taking too much time
Looking to free up corporate resources it could devote to product development, a major manufacturer of cleaning supplies and other household items took a hard look at its five-times a year financial forecasting efforts. Employees had long complained privately that the process was duplicative and overly burdensome, and the numbers the company discovered proved they were right: Staffers were spending 250,000 hours a year on going to meetings and filling out forms. The goal was to cut that number in half, without sacrificing accuracy.
Borrow ideas that had worked on the assembly line
The company had already used Six Sigma ideas to transform its manufacturing operations, and we were called in to help it bring the same efficiencies to its administrative functions. We went to work redesigning the forecasting process to eliminate waste and duplication. The effort's usefulness was immediately apparent; the CFO had initially been skeptical that a system that had been in place for so long would see any significant improvement. But within the first week, he became one of the program's biggest boosters.
A shot heard 'round the company
The goal of a 50% reduction in staff time was easily met. That saved the company $9 million, which it immediately plowed back into product development.
So impressed was the company with its newly nimble financial forecasting process that it began redesigning other corporate functions, with equally impressive results. It cut the period necessary to get new product data to its IT department from 35 days to five, and in marketing, there was a 70% reduction in the time required to get new plans approved.
The cumulative effect of these changes was considerable: SG&A costs dropped to less than 14% of net sales, putting the company in the top 25% of its industry.
in cost savings