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Last Post of Operations Management A to Z Articles - 2019 A to Z Blogging Articles
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When implemented throughout the enterprise, zero-based productivity can not only create a fit-for-purpose cost structure but also free up funds to invest in strategic growth initiatives. When zero-based productivity is rolled out as an overarching philosophy to promote a high-performance culture, an organization can achieve cost savings of 10 to 40 percent (depending on the spending area) while allocating more resources to strategic priorities. - McKinsey Consultants
McKinsey consultants provided the concept of zero-based productivity based on zero-based budgeting to provide a new direction to productivity management.
The idea of zero-based productivity proposed by them has application in planning, organizing, resourcing, directing, and control, the five functions of management.
Budgeting basically is planning. The consultants published an article explaining its role in organizing. Resources have to removed from low value generating activities and have to be allocated to new strategic initiatives. That is the main theme of zero-based productivity. The culture of the organization needs to be changed. Culture is basically behavior and hence it is part of directing function of management. The whole exercise is aimed at increasing effectiveness and efficiency. Hence control action is required to see that new plans are implemented through new organizations, newly acquired or modified resources, new behavior or processes. Also measurement of results has to be done and to take feedback based action to move the enterprise in the desired direction.
Internal and external benchmarks, from relevant peers as well as across internal markets and functions, are used to intelligently challenge current spending levels. These comparisons provide business leaders with the perspective to gauge the full potential savings available to their company and turn that potential into year-over-year targets for each function and market.
Zero-based productivity is an exercise to realign a company’s profit-and-loss statement with its strategic priorities. The organizaton may decide to operate with a smaller cost base or by redirect spending to more productive investments. The structural and cultural elements of zero-based productivity help to guide organizations and their management teams to achieve performance improvements. The journey toward productivity is more than a planning and budgeting activity, Executives should view it as a significant mind-set shift initiative that requires change management and system improvements to help employees deliver more than they ever thought possible.
About the author(s)
Søren Fritzen is a senior partner in McKinsey’s Copenhagen office; Matt Jochim is a partner in the London office; Carey Mignerey is a partner in the Atlanta office; and Mita Sen is an associate partner in the Zurich office.
https://www.mckinsey.com/business-functions/operations/our-insights/zero-based-productivity-the-power-of-informed-choices
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Zero-Based Productivity - Cost Savings
When implemented throughout the enterprise, zero-based productivity can not only create a fit-for-purpose cost structure but also free up funds to invest in strategic growth initiatives. When zero-based productivity is rolled out as an overarching philosophy to promote a high-performance culture, an organization can achieve cost savings of 10 to 40 percent (depending on the spending area) while allocating more resources to strategic priorities. - McKinsey Consultants
Zero-Based Productivity Management
McKinsey consultants provided the concept of zero-based productivity based on zero-based budgeting to provide a new direction to productivity management.
The idea of zero-based productivity proposed by them has application in planning, organizing, resourcing, directing, and control, the five functions of management.
Budgeting basically is planning. The consultants published an article explaining its role in organizing. Resources have to removed from low value generating activities and have to be allocated to new strategic initiatives. That is the main theme of zero-based productivity. The culture of the organization needs to be changed. Culture is basically behavior and hence it is part of directing function of management. The whole exercise is aimed at increasing effectiveness and efficiency. Hence control action is required to see that new plans are implemented through new organizations, newly acquired or modified resources, new behavior or processes. Also measurement of results has to be done and to take feedback based action to move the enterprise in the desired direction.
Zero-based Productivity - Basic Concept
Zero-based productivity: The power of informed choices
July 2018 Article
In this article, the first in a series, we examine the distinctive elements of zero-based productivity.
When implemented throughout the enterprise, zero-based productivity can not only create a fit-for-purpose cost structure but also free up funds to invest in strategic growth initiatives. When zero-based productivity is rolled out as an overarching philosophy to promote a high-performance culture, an organization can achieve cost savings of 10 to 40 percent (depending on the spending area) while allocating more resources to strategic priorities.
Internal and external benchmarks, from relevant peers as well as across internal markets and functions, are used to intelligently challenge current spending levels. These comparisons provide business leaders with the perspective to gauge the full potential savings available to their company and turn that potential into year-over-year targets for each function and market.
About the author(s)
Søren Fritzen is a senior partner in McKinsey’s Copenhagen office; Matt Jochim is a partner in the London office; Carey Mignerey is a partner in the Atlanta office; and Mita Sen is an associate partner in the Zurich office.
https://www.mckinsey.com/business-functions/operations/our-insights/zero-based-productivity-the-power-of-informed-choices
Building the zero-based culture
November 2018 Article
By Ronald Falcon, Hanspeter Hueter, Matthew Maloney, and Abhishek Shirali
ZBB evolves into zero-based productivity (ZBP), a performance-improvement dynamo that transforms the entire enterprise—achieving the ideal of fact-based, data-driven decisions that boost sales, reduce waste, and accelerate improvement year after year.
Zero-based productivity—Marketing
Zero-based productivity—Marketing: Measure, allocate, and invest marketing dollars more effectively
August 2018 Article
By Jeff Jacobs, Roberto Longo, Mita Sen, and Björn Time
Marketing is a function for consumer engagement,sales and revenue. Its costs can account for more than 10 percent of revenues in many consumer-facing businesses and this cost has to be understood and spent wisely. Waste in marketing cost has to be identified and eliminated.
Zero-based Productivity - Organization Redesign
December 2018| Article
By Onno Boer, Shaun Callaghan, Mita Sen, and Alexander Thiel
McKinsey consultants have published a series of articles on zero-based productivity. This article is on zero-based organization.
Using zero-based principles as a lens to assess organization combines planning for effectiveness and efficiency. With this approach, companies can capture significant efficiencies while upgrading capabilities and increasing effectiveness across functions. These principles also can ensure that the highest-value roles within the organization are clearly identified and staffed with the most qualified workers.
Traditional approaches to operations can miss opportunities to harness technology to boost efficiency. Assuming the current organizational structure as a starting point can hinder efforts to improve efficiency and reduce costs. Zero-basing organization, using zero-based principles as a lens to reshape organizational structure and operations, can unleash greater productivity. In the zero based organized structure, enterprise ensures that staff and resources are allocated to the highest-value areas of the business.
Zero-based Productivity - The Supply Chain Redesign
Zero-based productivity: Going granular and end-to-end across the supply chain
March 2019 Article
By Matt Jochim, Rehana Khanam, Cecilia Martensson, and Curt Mueller
By undertaking zero-based productivity improvement programes in supply chain, businesses have achieved overall cost savings of up to 50 percent. Rigorous productivity management and the right productivity improvement methods and techniques have to be in place to capture and sustain this level of improvement.
https://www.mckinsey.com/business-functions/operations/our-insights/zero-based-productivity-going-granular-and-end-to-end-across-the-supply-chainRelated article
Productivity Management in Operations Management
Happy. The last post of A to Z Blogging Challenge published.
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