Relative Cost Position(英文版)(ppt 49页).ppt

Author LairdReed CostPosition Relative March1998 2 Agenda Therelativecostposition RCP conceptApplicationsRCPStepsClientexampleChallengesKeytakeaways 3 Context RelativeCostPositionExperienceCurveCostSharingAnalysisBestDemonstratedPracticeValueChainAnalysisProfitHuntProductLineProfitability CostAllocation ActivityBasedCostingOverheadAnalysisFixed VariableAnalysisDirect IndirectAnalysis Costs Customers Competitors Capabilities Relativecostposition RCP isakeyanalyticaltoolusedforcostanalysis 4 FullPotential BainusesRCPtodetermineacompany spracticalfullpotentialcostpositionbasedonacomparisonofitsunitcostswiththoseofitscompetitorsandanunderstandingoftheclient sbusiness Lowestcost Practicalcost 5 QuestionsRCPCanHelpAnswer RCPanalysishelpsanswerbothstrategicandtacticalquestions Strategicquestions Tacticalquestions Inwhatareasdoourcompetitorshavethebiggestcostadvantage Whatisdrivingcompetitors profitability Howmuchflexibilitywouldourcompetitorshaveinapricewar Whatistheclient smarketposition Whatarethestrategicimplicationsofthefullpotentialcostposition Whereshouldwefocusourcostreductionefforts e g wagerates amountsofrawmaterialinputs Whichcostelementswoulddecreasesignificantlywithanincreaseinscale Whichcostelementsmightbenefitfromdifferentbusinesspractices 6 Agenda Therelativecostposition RCP conceptApplicationsRCPStepsClientexampleChallengesKeytakeaways 7 Applications Bainidentified 29MMinannualsavingsforachewinggummanufacturer AnRCPanalysisledtoadecreaseinrawmaterialsusage betterrawmaterialspurchasing processimprovements andmoreefficientinventorymanagement Bainhelpedaclientinthediaperbusinesstakebackmarketshareithadlost itsshareincreasedby10 theclienthadascale drivencostadvantage butwasmaintainingasignificantpriceumbrellaBainusedanRCPtoidentifyapriceabovetheclient sbreakevenbutbelowthecompetitor sbreakeventhisstrategyhadasubstantialpositiveimpactontheclient ssalesandprofitsBainpreventedaclientfrommakingapooracquisitiondecisioninthebakeryproductsmarket TheRCPshowedthatonecompetitorofthetargethada30 costadvantageandthatthetargetwouldnotbeabletoclosethatgap BainhasusedRCPeffectivelyformanyclients ExamplesofBainworkinclude 8 Agenda Therelativecostposition RCP conceptApplicationsRCPStepsClientexampleChallengesKeytakeaways 9 Approaches TherearetwowaystoapproachanRCP detailedbottom upanalysisortop downanalysis Detailedbottom upanalysis Top downanalysis BuildupeachmajorcostelementforkeycompetitorsbasedonprimarydataTriangulateusingcostdatafrommultiplesources Lessaccurate lesstimeintensive Comparecompetitors coststructurestoclient scoststructureatmacroleveldefinekeyprocess businesspracticedifferencesformajorcostelementsmakeassumptionsaboutthecostimpactofdifferencesTestassumptionsvs overallfinancialdata Moreaccurate moretimeintensive Oftentimesweuseacombinationofthesetwoapproaches 10 RCPSteps Mapthebusinessvaluechain Identifycostelementsanddrivers Scourinformationsourcesforcostdataonclientsandcompetitors Build compare andrealitycheckcostbars Calculatepracticalfullpotentialcostpositionandsavings Drawstrategicimplications ProcessSteps KeySuccessFactors Mapvaluechainfromendtoend e g rawmaterialstofinishedproductordelivery Tiecoststooperationsnotaccountingcategories BuildupcostbarscategorybycategoryRealitycheckresultsagainstsimilarcompanies FocusonareaswiththegreatestpotentialforcostsavingsAdjustforclient ssituation e g differentstrategy highqualityvs lowquality differentequipment differentplantlocations Determinehowtotakeadvantageoftheimprovedcostposition Bepersistentandcreative butethical DoinganRCPinvolvesseveralsteps 11 Agenda Therelativecostposition RCP conceptApplicationsRCPStepsClientexampleChallengesKeytakeaways 12 YummyGum Background Disguisedclientcase Yummygumhasasolidhitchhikerpositioninthepremiumgumcategory However Yummy s1997returnsarewellbelowexpectations YummyhastriedtocompetebyintroducingnewandcostlySKUsandincreasingadvertising Itsmaincompetitorhasfocusedoncostreduction HowcanYummyimproveprofitsinapremiummarketthatrequiresinnovationandstrongbrandequity Situation Complication Question BainusedRCPtohelpitsclientYummyGumimproveitsprofitability 13 RCPSteps Mapthebusinessvaluechain Identifycostelementsanddrivers Scourinformationsourcesforcostdataonclientsandcompetitors Build compare andrealitycheckcostbars Calculatepracticalfullpotentialcostpositionandsavings Drawstrategicimplications ProcessSteps KeySuccessFactors Mapvaluechainfromendtoend e g rawmaterialstofinishedproductordelivery 14 YummyGum ValueChain TherearesixmajorstepsinYummy svaluechain Rawmaterialspurchasing Basemaking Mixing Rolling Curing Packaging Understandingthevaluechainfacilitatesanunderstandingofthecostelements 15 RCPSteps Mapthebusinessvaluechain Identifycostelementsanddrivers Scourinformationsourcesforcostdataonclientsandcompetitors Build compare andrealitycheckcostbars Calculatepracticalfullpotentialcostpositionandsavings Drawstrategicimplications ProcessSteps KeySuccessFactors Tiecoststooperationsnotaccountingcategories 16 YummyGum Costs 1of7 Rawmaterialsare25 oftotalcosts Costdriversanddatasourcesarenoted QualityofingredientsMixofingredientsVolumeofingredientsAmountofwasteCostofingredients ReverseengineeringSuppliersPurchasingmanagersIndustryreports Costdrivers Datasources 17 YummyGum Costs 2of7 Packagingis7 oftotalcosts Costdriversanddatasourcesarenoted TypesofpackagingusedPackagingmaterialPackagesizeCostperpackage ReverseengineeringSuppliers10K annualreportOperationsmanager Costdrivers Datasources 18 YummyGum Costs 3of7 Directlaboris17 oftotalcosts Costdriversanddatasourcesarenoted NumberofworkersNumberofhoursworkedHourlywages benefitsMixofovertimevs regularpay 10K annualreportJobpostingsPlanttourUnioncontractsOperationsmanagerCompetitorphonebookFormeremployeesofcompetitorHumanresourcemanagerDepartmentofLabor Costdrivers Datasources ManufacturingprocessLinespeed throughput PlanttourMachinerysuppliers 19 YummyGum Costs 4of7 Indirectoverheadis8 oftotalcosts Costdriversanddatasourcesarenoted NondirectlaborWagesandbenefitsUtilitiesNumberofmachinesCostofmachinesAgeofmachinesMaintenancecosts JobpostingsPlanttourOperationsmanagersCompetitorphonebookFormeremployeesofcompetitorHumanresourcemanagerBlueprintsUtilitycompanyEnvironmentalProtectionAgencySuppliersSupplierproductsupportdepartmentWorkshopmanager Costdrivers Datasources 20 YummyGum Costs 5of7 Advertisingis15 oftotalcosts Costdriversanddatasourcesarenoted Advertisingcost 10K annualreportAdvertisingAge periodical LeadingNationalAdvertisers AdDollarSummary Costdrivers Datasources 21 YummyGum Costs 6of7 Salesandmarketingis20 oftotalcosts Costdriversanddatasourcesarenoted TradepromotionsConsumerpromotionsNumberofsalespeopleWagesandbenefits 10K annualreportHumanresourcemanagerMarketingdirectorInvestor publicrelationsSalespeopleSalesmanagerJobpostings Costdrivers Datasources 22 YummyGum Costs 7of7 Generalandadministrativeexpensesare8 oftotalcosts Costdriversanddatasourcesarenoted HeadcountWagesandbenefits 10K annualreportDun BradstreetCorporatephonebooksHumanresourcemanagerJobpostings Costdrivers Datasources 23 RCPSteps Mapthebusinessvaluechain Identifycostelementsanddrivers Scourinformationsourcesforcostdataonclientsandcompetitors Build compare andrealitycheckcostbars Calculatepracticalfullpotentialcostpositionandsavings Drawstrategicimplications ProcessSteps KeySuccessFactors Bepersistentandcreative butethical 24 DataSources Costinformation Formeremployees Utilitycompanies Financialanalysis Clientsalesandmarketing Industryexperts Marketresearchreports Plant sitetours Industryconventions Reverseengineeringreports Productbrochures Governmentfilingsandpatentfilings Supplierinterviews Literaturesearches Localnewspapers Equipmentvendors Customerinterviews Currentemployees Laborunions Thenextstepistoscourmyriadsourcesforcostinformation Multipledatasourcesshouldbeusedwheneverpossible 25 U S GovernmentSources Federal State Local Securityfilings U S EnvironmentalProtectionAgencyU S DepartmentofLaborEqualEmploymentOpportunitiesCommission EEOC PatentsandTrademarksNationalLaborRelationsBoard NLRB ConsumerProductsSafetyCommissionU S DepartmentofCommerce SolidWasteGroupAirQualityBureauOccupationalSafetyandHealthAssociation OSHA StateInsuranceDivisionEmergencyResponseCommissionannualinventoryfilingschemicalreleaseformsEmploymentSecurityDepartment DepartmentofEnergyResourcesDepartmentofEnvironmentalProtectionWaterBureauTownHallTaxAssessorFireMarshallChamberofCommercePlanningCommissionTownlandfill dumpWasteWaterCollectionBuildingInspectorsIndustrialDevelopmentBoard CompanydebtofferingsCompany10KOthercompanyfilings ThefollowingaresomeU S Governmentsources 26 ConductingaPlantTour Rawmaterialswaste spills overuse scrapProcessandmethodsquality yield alternativesLaborstaffing supervision workrules machineutilizationmaintenance changeover downtime bottlenecks speedsMaterialhandlingflow numberoftransactions numberofpeopleInventoryamount damaged amountofhandling storageefficiency workinprocessSchedulinghoworganized flexibility leadtimesPurchasingnumberandvarietyofsources standards Youmaywanttonotethefollowingwhenconductingaplanttour 27 RCPSteps Mapthebusinessvaluechain Identifycostelementsanddrivers Scourinformationsourcesforcostdataonclientsandcompetitors Build compare andrealitycheckcostbars Calculatepracticalfullpotentialcostpositionandsavings Drawstrategicimplications ProcessSteps KeySuccessFactors BuildupcostbarscategorybycategoryRealitycheckresultsagainstsimilarcompanies 28 YummyGum RawMaterials Rawmaterialscostsarebuiltupbymultiplyingingredientcostsbytheamountofingredientsusedforeachtypeofgum Sugar Sugarfree Bubble Ingredientcost mg sweetenerbaseflavorcolor 0 1 0 3 2 2 0 9 0 2 0 3 2 9 0 7 0 1 0 3 1 8 1 1 Xmgusedper100sticks sweetenerbaseflavorcolor 192mg107mg3mg6mg 76mg204mg6mg3mg 120mg125mg3mg6mg X100sticksproduced1997 10 202 793 61 291 522 15 845 631 Totalrawmaterialcost 6 5MM 58 8MM 9 7MM 75 0MM 29 YummyGum Packaging Totalpackagingcostsarebuiltupbymultiplyingthecostperinnerwrapbythenumberofsticksinapackageandthecostperouterwrapbythenumberofpackagesforeachtypeofpackage Fivestick Bigpack Multipack Numberofsticksperpack 5 20 10 Numberofpacks 1996 xcostperouterwrapping 310 286 6500 8908 2 8MM 574 604 8891 0268 Totalcost outerwrapping 71 825 6131 3849 1 0MM 5 9MM Numberofsticksxcostperfoilwrapping 1 551 433 2510 13 2 0MM 5 746 048 8900 13 Totalcost foilwrapping 1 436 512 2600 13 1 9MM 7 5MM Totalpackagingcost 4 8MM 2 9MM 13 4MM 21 1MM 30 YummyGum DirectLabor 1of2 Thewagerateshouldbeadjustedforovertimehours Inthisexample noovertimehourswererequired Directlaborcostsarecalculatedforeachstepofthevaluechain Forthemixingstep costsaredrivenbythenumberofhoursthemachinesarerunning thenumberofmachines thestaffpermachine andthewagerate Sugar Sugarfree Bubble Numberofmixingmachines X100sticks machine hour Total100sticks hour 6 993 5 958 1996100sticks totalsticks hour 1996operatinghours 15 845 631 2 660 XNumberofmachines XStaffingpermachine XWagerate 27 08 2 63 6 Totaldirectlaborcost mixing 1 1MM 8 1MM 2 942 1 884 10 202 793 5 415 2 4 7 27 08 1 4MM 1 884 9 1 339 12 051 61 291 522 5 086 9 4 5 27 08 5 6MM 12 051 5 958 100sticks machine hour 31 YummyGum DirectLabor 2of2 Thedirectlaborcostsforeachsteparethenaggregatedacrossthedirectlaborvaluechaintogiveatotaldirectlaborcostof 51MM RawmaterialpurchasingBasemakingMixingRolling curingPackaging 2 1MM 4 3MM 8 1MM 11 1MM 25 4MM Totaldirectlabor 51 0MM 1996Directlabor 32 YummyGum IndirectOverhead Overheadcost Drivers Cost Supervisorylabor Depreciation Overheadlabor Utilities Repairandmaintenance Numberofsupervisorsbydepartment XWageratesofsupervisor Assetregister P P E XDepreciationschedule Non directplantlaborers XWagerolesandbenefits Waterandelectricitycost unit XAmountusedofeach Averageannualcost machine XNumberofmachines 8 2MM 6 2MM 4 4MM 3 0MM 2 1MM 23 9MM Indirectoverheadconsistsofanumberofcostcategoriestotaling 23 9MM 33 YummyGum CostComparison TheBaincaseteam sanalysisofeachcostcategoryforYummyanditsmajorcompetitor Bolt revealedthatYummy s 0 64costdisadvantagecamemostlyfromrawmaterialsanddirectlabor Yummy sperunitcostdisadvantage 0 64 0 01 0 03 0 05 0 04 0 34 0 0 17 23 34 RCPSteps Mapthebusinessvaluechain Identifycostelementsanddrivers Scourinformationsourcesforcostdataonclientsandcompetitors Build compare andrealitycheckcostbars Calculatepracticalfullpotentialcostpositionandsavings Drawstrategicimplications ProcessSteps KeySuccessFactors FocusonareaswiththegreatestpotentialforcostsavingsAdjustforclient ssituation e g differentstrategy highqualityvs lowquality differentequipment differentplantlocations 35 YummyGum PotentialSavings TheBaincaseteamfocusedontheareaswiththelargestpotentialcostsavings Primarydrivers Costsavinglevers ScalepurchasingNegotiationwithsuppliersQualityofingredients MixofingredientsTotalamountusedper100sticks Unionvs non unionLocationBenefitsrates Staffing machinecomplexitytechnologyNumberofmachinesMachinespeed Rawmaterials Directlabor Price Amountused Wagerates Staffing 36 YummyGum RawMaterialsSavings Note Bainrecommendedandtheclientagreedthattheclientshouldreduceitssupplierbase Rawmaterialssavingsaccountfor 10 6MMincostreductionperyear Opportunity Quantificationmethodology Savingspotential Sweetenerrenegotiatemintoilpurchasingrenegotiatesweetenercontract 1 0MM 3 0MM purchasingmanagerestimatescompetitors contracts Baseandflavoringlessexpensiveingredientslessingredientsperstick lessflavorperstick off theshelfingredients adjustcost mginmodeladjustamountusedofeachingredientinmodel Othervolumediscounts 10 6MM supplierdataonvolumediscounts Totalrawmaterialsavings 1 0MM 5 6MM 37 YummyGum DirectLaborSavings Directlaborsavings primarilyfromreducingheadcount areworth 14 0MMperyear Opportunity Quantificationmethodology Savingspotential Crewreductionseliminateunnecessarystepsconsolidateidletime 6 4MM reducethestaffing machineinmodel Linespeedincreasereducechangeovers re toolingthemachinesforanewproduct improvetechnology increasethenumberof100sticks machine hourinmodel Automatesomejobscasepackingstocking removeorreducethestaffing machineinmodel 14 0MM 5 6MM Totaldirectlaborsavings 2 0MM 38 YummyGum TotalCostSavings Intotal Bainidentifiedandhelpedimplement 29 0MMincostreductionforYummyGum ImprovedinventorymanagementAdvertisingsavingsConsumerpromotionsavings 39 YummyGum PracticalFullPotentialCostPosition ThepracticalfullpotentialcostpositionofYummyGumishigherthanBoltGum scurrentcostsdueprimarilytoBolt slargerscale 100sticksproduced 87 3MM 126 4MM 87 3MM PracticalFullPotentialSavings 0 16 0 12 0 33 0 05fromvariousothersources 40 RCPSteps Mapthebusinessvaluechain Identifycostelementsanddrivers Scourinformationsourcesforcostdataonclientsandcompetitors Build compare andrealitycheckcostbars Calculatepracticalfullpotentialcostpositionandsavings Drawstrategicimplications ProcessSteps KeySuccessFactors Determinehowtotakeadvantageoftheimprovedcostposition 41 YummyGum StrategicImplications YummyuseditsimprovedcostpositiontocompetemoreeffectivelyagainstBolt Also YummyexecutivesfocusedonobtainingfulladvantageofthepotentialbenefitsofferedinareasinwhichYummywasnotlowcost Yummy scomplex yetflexible machineryallowsforproductinnovationsthatitsmaincompetitor Bolt cannotmatchcosteffectively Yummyplannedtopioneermoreinnovationslikethesuccessful YummyBlast LinespeedremainsslowerthanBolt sonaccountofYummy sdecisiontoproducesofter chewiergum Someofthe 29MMinsavingswouldbeusedtopromotethesequalitiesandenhanceYummy sbrandequity 42 Agenda Therelativecostposition RCP conceptApplicationsRCPStepsClientexampleChallengesKeytakeaways 43 Challenges Whatarethecompetitors inputs typesofinputsamountsofinputscostsofinputs ThechallengesarounddoinganRCPtypicallyrelatetogatheringdataonandunderstandingcompetitors coststructuresanddeterminingtheclient spracticalfullpotentialcostposition Whatmanufacturingprocessesdocompetitorsemploy typesofequipmenttypesoftechnologyamountofwaste Whatpracticesdocompetitorshaveinplace numberofshiftsamountofovertimesupervisortonon supervisorratiodeliverymethod Whatprocessesandpracticesshouldtheclientchange notchange Whatimpactwillthechangeshave Howmuchofthetheoreticalsavingswilltheclientbeabletoachieve Understandingcompetitors coststructures Determineclient spracticalfullpotentialcostposition 44 Agenda Therelativecostposition RCP con