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Three Real World Examplesof Cost Reduction SuccessStories   Free Content Provided By - T and T LLC
Engagement #1The mission was to understand why Plant Mangers at a large company were notmeeting profit margin.Step #1 – Lo...
Engagement #2The mission was to evaluate a large sub-assembly line for cost reductionopportunities.Step #1 – Evaluate the ...
Engagement #3The mission was to help build a Program Management group to handle newbusiness in a company.Step #1 – I alway...
If you have any questions or need help utilizing this tool please contactme.Tom Turner- Owner   T and T LLCWebsite- TomTur...
If you have any questions or need help utilizing this tool please contactme.Tom Turner- Owner   T and T LLCWebsite- TomTur...
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Three real world examples of cost reduction success

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Complete Cost Reduction Examples that include Mission, Discovery, and result.

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Three real world examples of cost reduction success

  1. 1. Three Real World Examplesof Cost Reduction SuccessStories Free Content Provided By - T and T LLC
  2. 2. Engagement #1The mission was to understand why Plant Mangers at a large company were notmeeting profit margin.Step #1 – Look for trends to develop a hypothesis Location Type of business Years in business Customer ….ETC In this step I was able to assess that the plants were showing severe profit degradation in the second year of production and this was more pervasive among more complicated work. I hypothesized that the predicted profit model was faulty and the first full your of production was the first real opportunity for it to show.Step#2 – Test the Hypothesis  I did ground up estimates by hand and tried to reconcile them to what was going on in the plants.Success - What I discovered was a 30% EBIT error in the estimating software. The Plant Managers were doing great when you consider the burden they started with.
  3. 3. Engagement #2The mission was to evaluate a large sub-assembly line for cost reductionopportunities.Step #1 – Evaluate the lines (their were two lines side by side) Measured time for assembly of the whole line Measured time for sub-assemblies (looked for reprocessing opportunities) Showed up early, late, and counted cars in the parking lot. In this step I caught the plant running without the counters on. In other words they were claiming a slower run time than they were experiencing. I found two robot assemblies that could be replaced by a man. The man being 10X faster than the robot. Lastly, I determined that the plant had half the manpower it was reporting and was making their production by keeping the counters turned off.Step#2 – Presented my findings  Presented my findings to the Plant Manager and was immediately kicked out of the plant.  Presented my findings to the Buyers.Success - Over night, a large manpower reduction was proposed by the supplier as a savings to us all.
  4. 4. Engagement #3The mission was to help build a Program Management group to handle newbusiness in a company.Step #1 – I always do a money walk through in a new company. I literally write a dollar sign on a sticky note and walk it through the system. (Sounds silly doesn’t it) While doing this I made two disturbing discoveries 1. Any person in the company could arrange for a check to go to an imaginary company, Invoice it, and get it paid. Then they could remove the paper trail because none of the paperwork was locked up. 2. I found a stack of papers in a corner unattended. It was over 11M in rejected invoices from the various customers.Step#2 – Presented my findings  Showed the paper trail issue to the VP and everything was locked down that day.  I compiled the rejected invoices in an Excel file and started reporting aged accounts with peoples names attached.Success - The security issues over paper work were secured and the aged accounts were cleared up in a little over three months.
  5. 5. If you have any questions or need help utilizing this tool please contactme.Tom Turner- Owner T and T LLCWebsite- TomTurner.BIZEmail-TomTurner@TomTurner.bizPhone - (586) 484-2908
  6. 6. If you have any questions or need help utilizing this tool please contactme.Tom Turner- Owner T and T LLCWebsite- TomTurner.BIZEmail-TomTurner@TomTurner.bizPhone - (586) 484-2908

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