As a result of securing a significant amount of capital investment, a business group was challenged with identifying opportunities to offset the deprecation cost. The offset was critical because in a weakened economy, their services still required a high level of cost competitiveness in the market.
The continuous improvement organization developed a value creation work process in where core teams across each function were established to strategically identify cost opportunities. The new work process included a digital dashboard that compiles historical cost data to trend potential opportunities for waste reduction.
Within two years of implementing the new work process, the teams generated enough value creation to offset the capital depreciation for the next five years. The majority of the waste/cost reductions were related to raw material consumption, equipment rentals, project management efficiency, and labor.
Millions of dollars of cost elimination