Exploiting hidden efficiency reserves

Targeted and structural result improvement projects as an alternative to flashy mega-programs

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80333 Munich

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MANAGEMENT SUMMARY

Less than a year ago, German businesses were considered the ultimate examples of efficiency and success. Crucial to this success were the sometimes large-scale restructuring programs of previous years, restraint in terms of wages and salaries, and the very international outlook.

However, the new cost reduction programs, introduced as a result of the financial crisis and the advent of the recession, seem more like defensive acts of desperation than targeted efficiency enhancements.
The undifferentiated slogan, “10% is everywhere,” in many instances strikes at the very substance of the company.

Conversely, the magnitude of the current crisis offers a management on the offensive the opportunity to dip into the hidden efficiency reserves in the organization. Three general rules for successful efficiency enhancement programs make the critical difference:

1. Using processes as the basis, rather than cost centers and head counts

2. Consistently dealing with structural causes of inefficiencies

3. Close control of the effects of measures, keeping up the pressure until the potential makes it onto the income statement


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