Akzeon Cost Advantage Model

Cost reduction is a never-ending battle. So why do companies find it so difficult to manage cost?

Our deep involvement with hundreds of companies over the years - from the world’s largest corporations on down to smaller companies in dozens of industries located in many countries – gave us a deep insight into the reasons for cost bloat. These are not the reasons associated with waste as in Lean, or from reliability failures as claimed by Six Sigma. Here are our validated observations:

Companies build capability to achieve a given business strategy. These capabilities are embedded in operating systems and processes.
The rate of change in the business environment forces companies to change their strategies, which forces systems and processes to change.
Reconfiguring systems and processes are difficult as they are deeply embedded in the operating cadence. This leaves many cost drivers still active even though the capability requiring the cost is no longer needed.
Finding and eliminating orphan cost drivers in systems requires different analysis and elimination techniques.
Instead of value stream analysis, we focus on underutilized, redundant or desynchronized systems.
Eliminating these deliver significant profit gain without harming essential processes and systems.

< Back