October 4, 2022
Rebalancing the margin tug-of-war
As the labor and supply cost rollercoaster continues, we are working with several clients to identify new management levers. Among them:
- Increasing the frequency of cost reviews to ensure faster customer price adjustments and/or tying customer pricing to component market indices
- Executing Value Analysis and Value Engineering efforts to drive down cost, including product reengineering
- Implementing Lean and continuous improvement initiatives to drive productivity across facilities and reduce labor cost per unit
- Improving procurement processes and strategies to minimize cost and maximize availability
- Near-shoring and reshoring manufacturing and logistics footprints to create products closer to final customer demand and improve supply chain resiliency
- Exploring renegotiation of facility leases, debt covenants and terms, etc.
Kormac’s Surgical Strike Methodology™ delivers the agility leading organizations need to meet their financial objectives.