Operations Analysis

Client	Fortune 20 electrical goods manufacturer
Challenge	Estimate impact of changes in manufacturing operations (such as reconfiguring operations, introducing labor-saving equipment, increasing production rates) on costs of existing products.
Solution	Model costs based on manufacturing work flow, including rework and defect rates. Track material, labor, overhead and capital costs separately. Modify cost accounting to reflect real costs instead of tax accounting.
Client Impact	Improved decision support for manufacturing changes. Estimated manufacturing costs of two successful new products.

Client	Travel division of global financial services company
Challenge	Determine whether benefits justify expensive new information system.
Solution	Determine costs and cost drivers of current and new systems, accounting for process flow and joint costs of products and processes.
Client Impact	$40M project by major computer vendor was terminated. European Division preserves profit margins. Control of I.T. returns to team that built in-house system.

Client	National Chemical Distributor
Challenge	Determine which products and customers drove the most cost, so they could be priced accordingly.
Solution	Analyze costs of physical distribution system. Warehousing cost model included many cost drivers. Delivery cost model included weight or volume determined truck space, length of deliver route, joint deliveries.
Client Impact	Altered warehouse layout, picking policies, and delivery logistics. Distribution analysis was a cornerstone of profitability analysis that improved division performance.

Manufacturing Cost Analysis