Why ET Advisory
Product cost and direct material represent your largest profitability opportunities. Often a handful of your suppliers generates over 70% of your cost. Fact-based negotiation and retaining these suppliers generate top-line growth. If you are a scaling business a handful of Cost Orchestrators can transform your business.
The challenge you often face is that there are only a few in your organization that can orchestrate product costs. They often lack the bandwidth to be involved in multiple cost projects or programs. This result in either in big product cost saving is left unaddressed or you are forced to send less qualified teams to orchestrate these product cost projects which increase the risk of low profitability
Cost Orchestration discipline increases your chances to manage product cost projects with less investment and increased profitability. This will be even more important given the current challenging economic landscape. Companies will need to downsize teams and cut investments whilst still under pressure to grow top-line profitability.
What options do you have to address Cost Orchestration?
You can do it yourself with current resources - The challenges we observe are that many companies don’t have know-how in-house to orchestrate costs and lack the bandwidth to be involved in multiple product cost projects.
Recruit Cost Orchestrators - A viable option if you can find talent that masters Cost Orchestration. We observe that this is a scarce resource. The second challenge is recruiting, onboard, and getting them fully operational is time-consuming. If you get the recruitment wrong, you lose even more time which can be fatal given the urgency to orchestrate costs to be competitive.
Buy components of Cost Orchestration and put it together yourself - Another option is to buy different components of Cost Orchestration, for example, Cost Engineering, Internal Costing, Technology cost models, target pricing, how to find new suppliers and the put it all together yourself in a Cost Orchestration discipline. What we observe is that companies struggle to create a cohesive orchestration discipline.
Buy and Adopt – If you are struggling with options 1-3, your fourth option is to invest in “Cost Orchestration” as a service or invest in cost orchestration and adopt it into your organization. This is the category of solutions ET Advisory represent.
What do we help you with?
Our strength in Cost Orchestration is built around a systematic approach as we know that Product Cost Management is something that will grow over time once its implemented and new areas will be considered constantly. With this knowledge in mind have we developed our ACPE methodology that takes a systematic approach that balances organization, processes, and methodologies with the optimal software solution to close the cost trap.
Our methodology is built around the 6 cornerstones in Product Cost Management:
Strategy - Increase the likelihood of Fact-based Negotiation.
Organization – Adopt the Cost Orchestration discipline.
Process & Methods – Assess, Create, Plan, Execute (ACPE).
Toolbox – Various of software’s for support the Cost Orchestration.
Competence & training – Both personal and organization.
Knowledge Management – Adopt the Cost Orchestration discipline at Management teams.