Structural Profit Reform
The basic goal of MCPD thinking is to ensure a sustainable competitive supremacy through cost-competitiveness improvement to achieve real structural profit reform based on productivity reform.
At the beginning of the MCPD projects, managers and practitioners are concerned about:
concomitant reconciliation between the need for price reduction, profit growth and cost reduction (based on Cost of Losses and Waste – CLW);
how to set manufacturing cost improvement (MCI) targets continuously linked to market needs and the impact of these targets on profitability targets;
the scientific determination of CLW and the setting scientific targets for CLW at the level of each Product Family Cost (PFC) process;
the percentages of external profit (from sales) and internal profit (from reducing CLW with KAIZEN and KAIKAKU) to meet target profit.
In my last book on MCPD, among other things, you can see:
a example of annual cost reduction of 7.6% – on pages 155-176 and
15 real KAIZEN/KAIKAKU for MCI – at pages 179-286.
So I invite you to see details 👉 here. Do you think the following approach can apply to your business? What challenges could arise?