《某咨询分析方法rcp3cjdi.pptx》由会员分享，可在线阅读，更多相关《某咨询分析方法rcp3cjdi.pptx（49页珍藏版）》请在taowenge.com淘文阁网|工程机械CAD图纸|机械工程制图|CAD装配图下载|SolidWorks_CaTia_CAD_UG_PROE_设计图分享下载上搜索。
1、Author:Laird ReedCost PositionRelativeMarch 19981Relative Cost PositionAgenda The relative cost position(RCP)conceptApplicationsRCP StepsClient exampleChallengesKey takeaways2Relative Cost PositionContext Relative Cost PositionExperience CurveCost Sharing AnalysisBest Demonstrated PracticeValue Chai
2、n AnalysisProfit HuntProduct Line Profitability/Cost Allocation/Activity Based CostingOverhead AnalysisFixed/Variable AnalysisDirect/Indirect AnalysisCostsCustomersCompetitorsCapabilitiesRelative cost position(RCP)is a key analytical tool used for cost analysis.3Relative Cost PositionFull Potential
3、Bain uses RCP to determine a companys practical full potential cost position based on a comparison of its unit costs with those of its competitors and an understanding of the clients business.Lowest costPractical cost4Relative Cost PositionQuestions RCP Can Help Answer RCP analysis helps answer both
4、 strategic and tactical questions.Strategic questionsTactical questionsIn what areas do our competitors have the biggest cost advantage?What is driving competitors profitability?How much flexibility would our competitors have in a price war?What is the clients market position?What are the strategic
5、implications of the full potential cost position?Where should we focus our cost reduction efforts?(e.g.,wage rates,amounts of raw material inputs)Which cost elements would decrease significantly with an increase in scale?Which cost elements might benefit from different business practices?5Relative C
6、ost PositionAgenda The relative cost position(RCP)conceptApplicationsRCP StepsClient exampleChallengesKey takeaways6Relative Cost PositionApplications Bain identified$29MM in annual savings for a chewing gum manufacturer.An RCP analysis led to a decrease in raw materials usage,better raw materials p
7、urchasing,process improvements,and more efficient inventory management.Bain helped a client in the diaper business take back market share it had lost;its share increased by 10%the client had a scale-driven cost advantage,but was maintaining a significant price umbrellaBain used an RCP to identify a
8、price above the clients breakeven but below the competitors breakeventhis strategy had a substantial positive impact on the clients sales and profitsBain prevented a client from making a poor acquisition decision in the bakery products market.The RCP showed that one competitor of the target had a 30
9、%cost advantage and that the target would not be able to close that gap.Bain has used RCP effectively for many clients.Examples of Bain work include:7Relative Cost PositionAgenda The relative cost position(RCP)conceptApplicationsRCP StepsClient exampleChallengesKey takeaways8Relative Cost PositionAp
10、proaches There are two ways to approach an RCP:detailed bottom-up analysis or top-down analysis.Detailed bottom-up analysisTop-down analysisBuild up each major cost element for key competitors based on primary dataTriangulate using cost data from multiple sourcesLess accurate,less time intensiveComp
11、are competitors cost structures to clients cost structure at macro leveldefine key process/business practice differences for major cost elementsmake assumptions about the cost impact of differencesTest assumptions vs.overall financial dataMore accurate,more time intensiveOftentimes we use a combinat
12、ion of these two approaches9Relative Cost PositionRCP Steps Map the business value chainIdentify cost elements and driversScour information sources for cost data on clients and competitorsBuild,compare,and reality check cost barsCalculate practical full potential cost position and savingsDraw strate
13、gic implicationsProcess StepsKey Success FactorsMap value chain from end to end(e.g.,raw materials to finished product or delivery)Tie costs to operations not accounting categoriesBuild up cost bars category by categoryReality check results against similar companiesFocus on areas with the greatest p
14、otential for cost savingsAdjust for clients situation(e.g.,different strategy(high quality vs.low quality),different equipment,different plant locations)Determine how to take advantage of the improved cost positionBe persistent and creative,but ethicalDoing an RCP involves several steps:10Relative C
15、ost PositionAgenda The relative cost position(RCP)conceptApplicationsRCP StepsClient exampleChallengesKey takeaways11Relative Cost PositionYummy Gum*-Background*Disguised client caseYummy gum has a solid hitchhiker position in the premium gum category.However,Yummys 1997 returns are well below expec
16、tationsYummy has tried to compete by introducing new and costly SKUs and increasing advertising.Its main competitor has focused on cost reductionHow can Yummy improve profits in a premium market that requires innovation and strong brand equity?Situation:Complication:Question:Bain used RCP to help it
17、s client Yummy Gum improve its profitability.12Relative Cost PositionRCP Steps Map the business value chainIdentify cost elements and driversScour information sources for cost data on clients and competitorsBuild,compare,and reality check cost barsCalculate practical full potential cost position and
18、 savingsDraw strategic implicationsProcess StepsKey Success FactorsMap value chain from end to end(e.g.,raw materials to finished product or delivery)13Relative Cost PositionYummy Gum-Value ChainThere are six major steps in Yummys value chain:Raw materials purchasingBase makingMixingRollingCuringPac
19、kagingUnderstanding the value chain facilitates an understanding of the cost elements14Relative Cost PositionRCP Steps Map the business value chainIdentify cost elements and driversScour information sources for cost data on clients and competitorsBuild,compare,and reality check cost barsCalculate pr
20、actical full potential cost position and savingsDraw strategic implicationsProcess StepsKey Success FactorsTie costs to operations not accounting categories15Relative Cost PositionYummy Gum-Costs(1 of 7)Raw materials are 25%of total costs.Cost drivers and data sources are noted.Quality of ingredient
21、sMix of ingredientsVolume of ingredientsAmount of wasteCost of ingredientsReverse engineeringSuppliersPurchasing managersIndustry reportsCost driversData sources16Relative Cost PositionYummy Gum-Costs(2 of 7)Packaging is 7%of total costs.Cost drivers and data sources are noted.Types of packaging use
22、dPackaging materialPackage sizeCost per packageReverse engineeringSuppliers10K/annual reportOperations managerCost driversData sources17Relative Cost PositionYummy Gum-Costs(3 of 7)Direct labor is 17%of total costs.Cost drivers and data sources are noted.Number of workersNumber of hours workedHourly
23、 wages/benefitsMix of overtime vs.regular pay10K/annual reportJob postingsPlant tourUnion contractsOperations managerCompetitor phone bookFormer employees of competitorHuman resource managerDepartment of LaborCost driversData sourcesManufacturing processLine speed/throughputPlant tourMachinery suppl
24、iers18Relative Cost PositionYummy Gum-Costs(4 of 7)Indirect overhead is 8%of total costs.Cost drivers and data sources are noted.Non direct laborWages and benefitsUtilitiesNumber of machinesCost of machinesAge of machinesMaintenance costsJob postingsPlant tourOperations managersCompetitor phone book
25、Former employees of competitorHuman resource managerBlueprintsUtility companyEnvironmental Protection AgencySuppliersSupplier product support departmentWorkshop managerCost driversData sources19Relative Cost PositionYummy Gum-Costs(5 of 7)Advertising is 15%of total costs.Cost drivers and data source
26、s are noted.Advertising cost10K/annual reportAdvertising Age(periodical)Leading National Advertisers Ad Dollar SummaryCost driversData sources20Relative Cost PositionYummy Gum-Costs(6 of 7)Sales and marketing is 20%of total costs.Cost drivers and data sources are noted.Trade promotionsConsumer promo
27、tionsNumber of sales peopleWages and benefits10K/annual reportHuman resource managerMarketing directorInvestor/public relationsSales peopleSales managerJob postingsCost driversData sources21Relative Cost PositionYummy Gum-Costs(7 of 7)General and administrative expenses are 8%of total costs.Cost dri
28、vers and data sources are noted.HeadcountWages and benefits10K/annual reportDun&BradstreetCorporate phone booksHuman resource managerJob postingsCost driversData sources22Relative Cost PositionRCP Steps Map the business value chainIdentify cost elements and driversScour information sources for cost
29、data on clients and competitorsBuild,compare,and reality check cost barsCalculate practical full potential cost position and savingsDraw strategic implicationsProcess StepsKey Success FactorsBe persistent and creative,but ethical23Relative Cost PositionData Sources Cost informationFormer employeesUt
30、ility companiesFinancial analysisClient sales and marketingIndustry expertsMarket research reportsPlant/site toursIndustry conventionsReverse engineering reportsProduct brochuresGovernment filings and patent filingsSupplier interviewsLiterature searchesLocal newspapersEquipment vendorsCustomer inter
31、viewsCurrent employeesLabor unionsThe next step is to scour myriad sources for cost information.Multiple data sources should be used whenever possible24Relative Cost PositionU.S.Government Sources FederalStateLocalSecurity filingsU.S.Environmental Protection AgencyU.S.Department of LaborEqual Employ
32、ment Opportunities Commission(EEOC)Patents and TrademarksNational Labor Relations Board(NLRB)Consumer Products Safety CommissionU.S.Department of CommerceSolid Waste GroupAir Quality BureauOccupational Safety and Health Association(OSHA)State Insurance DivisionEmergency Response Commissionannual inv
33、entory filingschemical release formsEmployment Security DepartmentDepartment of Energy ResourcesDepartment of Environmental ProtectionWater BureauTown HallTax AssessorFire MarshallChamber of CommercePlanning CommissionTown landfill/dumpWaste Water CollectionBuilding InspectorsIndustrial Development
34、BoardCompany debt offeringsCompany 10KOther company filings The following are some U.S.Government sources:25Relative Cost PositionConducting a Plant Tour Raw materialswaste,spills,overuse,scrapProcess and methodsquality,yield,alternativesLaborstaffing,supervision,work rules,machine utilizationmainte
35、nance,changeover,downtime,bottlenecks,speedsMaterial handlingflow,number of transactions,number of peopleInventoryamount,damaged,amount of handling,storage efficiency,work in processSchedulinghow organized,flexibility,lead timesPurchasingnumber and variety of sources,standardsYou may want to note th
36、e following when conducting a plant tour:26Relative Cost PositionRCP Steps Map the business value chainIdentify cost elements and driversScour information sources for cost data on clients and competitorsBuild,compare,and reality check cost barsCalculate practical full potential cost position and sav
37、ingsDraw strategic implicationsProcess StepsKey Success FactorsBuild up cost bars category by categoryReality check results against similar companies27Relative Cost PositionYummy Gum-Raw MaterialsRaw materials costs are built up by multiplying ingredient costs by the amount of ingredients used for e
38、ach type of gum.SugarSugar freeBubbleIngredient cost/mgsweetenerbaseflavor color0.10.32.20.90.20.32.90.70.10.31.81.1X mg used per 100 stickssweetenerbaseflavorcolor192mg107mg3mg6mg76mg204mg6mg3mg120mg125mg3mg6mgX 100 sticks produced 199710,202,79361,291,52215,845,631 Total raw material cost:$6.5MM$5
39、8.8MM$9.7MM$75.0MM+28Relative Cost PositionYummy Gum-PackagingTotal packaging costs are built up by multiplying the cost per inner wrap by the number of sticks in a package and the cost per outer wrap by the number of packages for each type of package.Five stickBig packMultipackNumber of sticks per
40、pack52010Number of packs(1996)x cost per outer wrapping310,286,6500.8908$2.8MM574,604,8891.0268 Total cost(outer wrapping)71,825,6131.3849$1.0MM$5.9MMNumber of sticksx cost per foil wrapping1,551,433,2510.13$2.0MM5,746,048,8900.13Total cost(foil wrapping)1,436,512,2600.13$1.9MM$7.5MMTotal packaging
41、cost$4.8MM$2.9MM$13.4MM$21.1MM+29Relative Cost PositionYummy Gum-Direct Labor(1 of 2)*The wage rate should be adjusted for overtime hours.In this example,no overtime hours were required.Direct labor costs are calculated for each step of the value chain.For the mixing step,costs are driven by the num
42、ber of hours the machines are running,the number of machines,the staff per machine,and the wage rate.SugarSugar freeBubbleNumber of mixing machinesX 100 sticks/machine/hourTotal 100 sticks/hour69935,9581996 100 sticks/total sticks/hour1996 operating hours15,845,6312,660X Number of machinesX Staffing
43、 per machineX Wage rate*$27.082.636Total direct labor cost(mixing)$1.1MM$8.1MM29421,88410,202,7935,41524.7$27.08$1.4MM1,88491,33912,05161,291,5225,08694.5$27.08$5.6MM12,0515,958+MixingRollingBase makingCuringPackagingRaw material purchasing 100 sticks/machine/hour30Relative Cost PositionYummy Gum-Di
44、rect Labor(2 of 2)The direct labor costs for each step are then aggregated across the direct labor value chain to give a total direct labor cost of$51MM.Raw material purchasingBase makingMixingRolling/curingPackaging$2.1MM$4.3MM$8.1MM$11.1MM$25.4MMTotal direct labor$51.0MM1996 Direct labor31Relative
45、 Cost PositionYummy Gum-Indirect Overhead Overhead costDriversCostSupervisory laborDepreciationOverhead laborUtilitiesRepair and maintenanceNumber of supervisors by departmentX Wage rates of supervisorAsset register/P,P,&EX Depreciation scheduleNon-direct plant laborersX Wage roles and benefitsWater
46、 and electricity cost/unitX Amount used of eachAverage annual cost/machineX Number of machines$8.2MM$6.2MM$4.4MM$3.0MM$2.1MM$23.9MMIndirect overhead consists of a number of cost categories totaling$23.9MM.32Relative Cost PositionYummy Gum-Cost Comparison The Bain case teams analysis of each cost cat
47、egory for Yummy and its major competitor,Bolt,revealed that Yummys$0.64 cost disadvantage came mostly from raw materials and direct labor.Yummysper unit cost disadvantage$0.64$0.01$0.03$0.05$0.04$0.34$0$0.1723%33Relative Cost PositionRCP Steps Map the business value chainIdentify cost elements and d
48、riversScour information sources for cost data on clients and competitorsBuild,compare,and reality check cost barsCalculate practical full potential cost position and savingsDraw strategic implicationsProcess StepsKey Success FactorsFocus on areas with the greatest potential for cost savingsAdjust fo
49、r clients situation(e.g.,different strategy(high quality vs.low quality),different equipment,different plant locations)34Relative Cost PositionYummy Gum-Potential Savings The Bain case team focused on the areas with the largest potential cost savings.Primary drivers:Cost saving levers:Scale purchasi
50、ngNegotiation with suppliersQuality of ingredientsMix of ingredientsTotal amount used per 100 sticksUnion vs.non-unionLocationBenefits ratesStaffing/machinecomplexitytechnologyNumber of machinesMachine speedRaw materialsDirect laborPriceAmount usedWage ratesStaffing35Relative Cost PositionYummy Gum-