Cost pressure can force businesses to make decisions that have critical ramifications across their operations, workforces, sales and revenue goals. Cost pressure can arise from a spectrum of forces from downturns in the economy and misaligned forecasting projections to transformative events such as mergers, acquisitions and takeovers.
Myrtle Consulting Group offers expertise in both short-term and long-term cost-pressure solutions that address challenges ranging from company-wide organizational restructuring and procurement demands to capital expense elimination and inefficient operational processes. Our teams begin by gaining a deep understanding of specific cost-pressure situations, and then providing thoughtful, collaborative solutions that deliver value and results based on a sensible timeline.
Reducing Material Cost
Manufacturers are continually forced to adapt to fluctuating material costs due to supply and demand. They understand the importance of optimizing the use of materials and minimizing waste. By optimizing processes, leveraging a material loss accounting system and changing execution behaviors, Myrtle Consulting Group has helped clients reduce over-weights, scrap and material losses due to process variation.
Improving Cash Flow
Cash flow problems in business can cause major operation disruptions. These problems are often avoidable because they reflect only a temporary reduction in the amount of money available and do not reflect the actual earnings during the year. Slow-paying invoices, expensive debt, high overhead expenses, poor sales forecasting, and excess inventory are common challenges our clients face. Myrtle has helped clients overcome these challenges through a comprehensive approach to reducing working capital. Optimization of working capital is a key enabler for value creation for many of our clients. It is an optimum way to release cash out of non-profitable assets to repay debt, expand through investment, or conduct acquisitions without incurring further indebtedness.
Zero-Based Budgeting (ZBB), a methodology to identify and eliminate costs not aligned with strategic needs, differs from typical cost-cutting exercises. As a result, companies that apply ZBB have shown to outpace their competitors on margin growth and revenue growth. In our experience, they are ultimately able to decrease costs by as much as 20-25%.
While the financial gains of applying ZBB are very attractive, the efforts to achieve these gains can feel quite difficult and daunting. Implementing ZBB often requires significant coaching and training, employee engagement, new routines and behaviors, a deep understanding of the operational to financial link, and strong alignment with management tools and systems. Myrtle has helped global clients redesign their cost structures, transform their cost management culture, and significantly reduce their spend by eliminating non-value add costs permanently.
Management Operating System (MOS)
Companies are constantly seeking ways to streamline their businesses, make better decisions and gain competitive advantage. Technology has revolutionized business, providing more data that can be used to make better decisions. However, the vast majority of businesses lack structured data-driven decision making across the organization.
Myrtle Consulting’s Management Operating System (MOS) deployment methodology transforms company culture from one of “gut decision-making” into one that bases decisions on data, facts, and information. The results are beyond impressive, generating annual savings in the tens of millions of dollars. By implementing Myrtle’s MOS deployment methodology, companies can build a sustainable competitive advantage and improve the overall health and longevity of their businesses.
Program Management Office
Any successful implementation effort requires having a clear, consistent and sustainable initiative from the start. A robust Program Management Office consists of a set of milestones and blueprints with clear assignments needed to drive ownership. This consists of understanding how long implementation efforts will take, holding people within the company accountable to execute the vision and providing a good sense of the resources required. By establishing robust Program Management processes and systems, Myrtle has helped hundreds of organizations achieve success in their implementation efforts.