SERVICES

You all know the drill.  Costs are rising, and many businesses are watching volumes fall off precipitously.  We’ve got to get more out of existing resources, and be able to rely on improved throughput and cost performance.  And get matters under control soon.  Logistics costs have risen to decade-old levels, hitting 10.1% of GDP, according to the 2008 State of Logistics report.

The context for cost reduction is all-important.  Anybody can slash and burn for fast – and fast fading – results.  We understand that doing the right things – and doing them right – to drive throughput, to leverage people and facility resources, and to deliver superior customer service are critical to realizing the cost reductions that will be effective for years to come.

The Progress Group brings a unique combination of breakthrough analytic approaches, unparalleled experience, and uncommon perspective to the many issues and opportunities in the realm of cost reduction.  We build on decades of hands-on cost planning and management, with 21st-century advances in analytic technology and processes.  We may not be traditional – there’s often not time for that.  We definitely dig deeper for gold than anyone, because we know how to do that quickly and cost-effectively.

Reality is that there’s usually no “silver bullet” in cost reduction.  The effort most often involves hard slogging through a myriad of details to unearth incremental improvements that really add up at the end of the day.  It’s often advances that only we know how to identify, because its usually too time- and-resource-consuming to do internally – or with other consultants.  Other times, there may be well-understood improvements to be made, but you need to find resources with the perspective to put all the pieces together.  We can be there for you in this critical effort – because we’ve been there before.  And, we know how to effectively team with your people to leverage both resources and knowledge.

This is a demanding arena in which to make significant change.  And, people would like to believe that standard traditional approaches will get them where they need to be.  Not so.  The hidden – and real – gains come in seconds and fractions, multiplied by thousands of transactions and hundreds of working associates.  These won’t be uncovered by your LMS, or by standards programs like MTM and MOST.  And, the traditional engineering resources needed to really dive in are usually too big in time and numbers to warrant the effort.

The Progress Group uses unique combinations of time study, data analysis, benchmarked performance, and observation to identify savings and throughput improvements that simply can’t be done by anyone else.  Our teams are dead-accurate in this analysis, at a cost one-third, or less, of more traditional approaches, and that can deliver a cost-justified result – fast.  How critical is this?  Warehousing costs rose over 10%, according to the State of Logistics report.  You probably don’t want that trend line to continue.

Of course, there’s still the hard work of implementing and institutionalizing process change and performance expectations, of reporting and communicating outcomes.  And, gains can be lost if they’re not immediately baked into labor and staffing planning processes.  But, that’s where TPG really comes through – making things happen and making them last.

Transportation costs accounted for over half the national increase in logistics costs last year.  Truck transport alone accounted for almost $675 million out of the nearly $1.4 billion US logistics costs.  People are pulling out all the stops to try to get this under control, but may not fully understand what – and where – all the stops really are.

Fuel prices are sometimes lower than at their recent peaks; there’s every reason to think they’ll reach those high levels again – and soon – for no particular reason.  So, there’s more to this that consolidating the LTL carrier base, or looking at the feasibility of mode shifts.  You’ve got to be thinking about – despite ups and downs – how to approach the long haul.  Maybe it’s time to evaluate in-sourcing or near-shoring as part of the equation.

Whatever delivers payback, minimizes and/or manages transport expenditure, and sets a solid foundation for the new reality of global supply chain competition is an implementable program we can help you reap benefits from.

Inventory management became the red-headed step-child of cost management focus – until we discovered that off-shoring and supplier uncertainty were driving inventories through the roof, with continuing customer service exposures.  Nearly 45% of the US increase in logistics costs was driven by inventory-related costs.  Suddenly, the spotlight is justifiably back on inventory as a source of savings, both of operating cost and of capital expenditure.  The Progress Group can help – not only with your inventories, but with those of your suppliers and customers, as well.

Three elements related to facilities can make a big difference in costs.  Layout particularly can jump-start people performance improvement.  Slotting, putaway processes, “hot” SKU pick and replenishment tactics are usually short-term payback opportunities, but simply redesigning flows and functional placement to reflect today’s business, rather than yesterday’s, can move the throughput/performance needle in a noticeable way.

Material handling and control systems are also part of this holistic solution, and frequently offer benefits and problem fixes at a fraction of the investment needed to start from scratch.

A longer-term effort that might require some investment, but a critical one, is the redeployment of distribution facilities in a restructured overall distribution network.  Sources change.  Points of entry into the US change.  Customers – and associated business volumes – shift.  Every time those things happen without a corresponding re-draw of the network, operating costs that could and should be managed go up un-necessarily.

There are frequently hidden opportunities – and big ones – within supplier and manufacturing trading partners (or internal resources).  Working on programs to collaborate, and better integrate – or to source products and materials from partners who are readier to play ball - can deliver visible results.  Lengthy programs and elegant methodologies are not a pre-requirement for these to be successful.  Open, honest communications and working teams that span the supply chain are.  We know how to put these arrangements together, and make them work.

Despite what you might think, HR is your pivotal ally.  They can help you upgrade the caliber of new hires, find and test applicants for skills that are vital to success in your fast-paced and demanding environment, and help you retain the best employees.  Employee retention is a million-dollar plus savings opportunity in many companies. 

Additionally, the HR role in associate training and development can be a key success factor, especially when times get tough.  One of the most devastating false economies when companies consider cutbacks is to reduce the training/development effort.  At The Progress Group we have a track record of aligning HR and senior management activities and objectives to accomplish sustainable results.