Is Continuous Improvement Good Enough?
The good news is most companies have been paying attention to cost reduction initiatives by way of lean and six-sigma for process excellence, etc. The bad news is even with the addition of these crises-driven cost saving measures, we can only achieve modest improvements of 5% to 10% at most. Obviously, these alone will not help us weather the storm. To understand the journey that we must take, let us begin by examining the primary cost levers. The potential savings each of these cost levers brings will vary according to industry type and company size (see Figure 1). Think Big To Survive Continuous improvements with incremental savings may suffice during good times to keep the shareholders happy, but it is the ‘think-big-get-big’ double-digit cost savings that comes from rationalizing the company’s infrastructure, improving the business model and developing a scalable cost structure that will sustain and keep the company healthy through these challenging times. Higher cost savings simpl
