Enterprise vs Cost Center Thinking

Don’t fool yourself by only considering incremental cost.

World class organizations think enterprise wide when completing cost analysis.

Don’t get trapped into trying to optimize:

• Receiving Cost
• Ordering Cost
• The cost to borrow for capital investment.
• Machine efficiency
• etc.

Consider the total cost saving to the enterprise. By cutting inventory 50%, will require more frequent receipts. However, the total enterprise cost reduce.

• We much lower capital requirements.
• Freed floor space that can be used for value added operations.
• Less excess and obsolete inventory.
• Etc.

Are you ready to reframe your focus?