Skip to main content Skip to Footer

STRATEGY


Manufacturing Strategy: Are you manufacturing at perfect cost?

Manufacturers need a better way to assess cost, value and performance to boost competitiveness.

Overview

Manufacturing is back and capacity utilization is tight around the world. But how can companies fulfill demand profitably? In many cases, traditional measurement approaches are no longer helping. Companies use old or broken metrics that do not do not allow full visibility into the manufacturing processes and do not focus directly on business value. By contrast, “Perfect Cost” is a strategic measure, using analytics and other assessment tools, to help organizations understand how they are tracking to the best possible manufacturing performance across the enterprise.

DOWNLOAD ARE YOU MANUFACTURING AT PERFECT COST? GAINING COMPETITIVE ADVANTAGE THROUGH A VALUE-BASED ANALYSIS [PDF]

Key Findings

Many companies have much more capacity than they think they do. Accenture research shows that 63 percent of manufacturing executives plan to get more out of what they already have invested within their manufacturing and supply chain network. By getting the most out of existing facilities, companies can eliminate redundant capital investment in capacity and free it up for growth, innovation and increased competitiveness.

Perfect Cost enables companies to analyze performance of the manufacturing network to understand current costs and future “perfect” costs while understanding capacity to meet current and future demand.

Analytics-based examination of the manufacturing environment is conducted across multiple levers:

  • Capital utilization

  • Reliability

  • Labor utilization

  • Digital

  • Supply chain and manufacturing integration

Recommendations

Perfect Cost analysis is potentially a breakthrough method of finding extra capacity at a lower cost per unit in the manufacturing network. The following are keys to success:

  • Combine operational and financial metrics to measure the value of your manufacturing performance relative to perfect cost.

  • Identify the value that can be driven from manufacturing operations and rigorously measure progress toward that target.

  • Use analytics to gain better visibility into manufacturing value and opportunities.

  • Don’t start with an arbitrary, fixed percentage for year-on-year improvement. Define value targets unique to your manufacturing environment and business goals.


Authors
Russ Rasmus
Russ Rasmus

Managing Director, Accenture Strategy – Operations

Russell Rasmus is a Managing Director in Accenture Strategy – Operations and leads the global Manufacturing practice. Russ has over 20 years of experience in manufacturing and supply chain management and has advised numerous clients in various industries on large and complex manufacturing and supply chain transformations. He holds a diploma in Industrial Engineering from Iowa State University of Science and Technology. Russell resides in Kansas City.

Linkedin

Joey Lanius
Joey Lanius

Managing Director, Accenture Strategy – Operations

Joey Lanius is a Managing Director in Accenture Strategy – Operations and leads the North America Manufacturing Practice. He has over 15 years of experience working with global organizations on a wide range of transformational programs and manufacturing strategies. Joey holds a B.S. in Industrial Technology from Tennessee Technological University and a MBA from Western Kentucky University. He is a certified Master Black Belt in Lean Six Sigma and a member of the executive advisory board for the Gordon Ford College of Business at Western Kentucky University. Joey is based in Dallas, TX. 

Linkedin