“This is an ambitious book packed with insight and fresh thinking. Separating good from bad complexity costs is a critical task facing companies today, and the authors provide a compelling roadmap for solving the problem.”
Michael B. McCallister, President and CEO, Humana Inc.
“Waging War on Complexity Costs examines an incredibly important and often overlooked aspect of business and organizations in general—regulators and government officials should read this book and take notice. Complexity dramatically increases costs and risk of failure. It is like a cancer that eats away at efficiency and profitability.”
Andy Beal, Chairman and CEO, Beal Bank
“This is by far the best and most useful explanation of how to address complexity in a business. Waging War on Complexity Costs frames the issue in a way that companies can finally tackle the problem—this book delivers.”
Ahmad R. Chatila, CEO, MEMC Electronic Materials Inc.
“This is the first book that really targets organizational complexity in a compelling way, making this a must-read for any organization that is looking to distance itself from the competition. After years of cost-cutting, many companies are realizing that they still don’t have a discernable cost advantage. This book provides the platform to achieve just that, by attacking the complexity that bogs them down.”
Tom DiDonato, EVP Human Resources, American Eagle Outfitters, Inc.
About the Book:
Complexity costs are the single biggest determinant of your company’s cost competitiveness. For the past two decades the pursuit of growth has created massive complexity in processes, product portfolios, and organizations, adding costs that companies can ill afford. The only good news is that your competitors may be carrying as much complexity as you are. Learn how to eliminate this complexity, and you can create a tremendous cost advantage over your competition.
In Waging War on Complexity Costs, Stephen Wilson and Andrei Perumal deliver a powerful and practical approach for reclaiming your cost advantage. This executive-level resource presents a wealth of insight and new research to definitively answer key questions such as:How can I quantify the cost of complexity without getting lost in a sea of data? Where are the biggest opportunities for reducing product, process, and organizational complexity, and how can I cut through the interdependencies that trap these costs? How can I see results quickly by taking targeted actions against key levers? How do I keep complexity costs at bay? It is not enough to attack bloated product portfolios. Substantive cost improvements require addressing the complexity in the underlying processes and organizational structures. Waging War on Complexity Costs provides a wealth of relevant case studies with examples from Kraft, Tesco, Fiat, and the U.S. Navy and highlights specific strategies for reducing costs by 15-30% in significant portions of your business.
Tomorrow’s consumers are emerging as wellinformed customers who know what they want and the price they’re willing to pay for it. Complexity not only drives costs; it creates a barrier between you and the customer. Declare a war on complexity costs and prepare for profitable growth.
In today's economic climate, the need to cut costs can be the difference between success and failure. Cost Reduction and Optimization for Manufacturing and Industrial Companies covers all major cost reduction areas, providing easy to read examples and advice on steps to take. It provides the roadmap for implementing recommended actions with true and tried methods by taking a modern, all-inclusive look at manufacturing processes. Based on the author's cost reduction experience gained during 30 years of senior operations and consulting engagements with hundreds of organizations, this book includes easy-to-understand and easy-to-implement cost reduction concepts organized into five general areas --labor, material, design, process, and overhead.
Dives into a cost reduction area and starts with the bottom line first by summarizing key points
Provides proven tactics for cutting costs without a lot of extraneous data
Follows a qualitative and design-oriented approach
Emphasizes quick implementation and measurable cost reduction
Identifies who in the organization should do the work
Outlines risks and suggested risk mitigation actions
Contains numerous tables, graphs, and photos to show the concepts described in the book
Praise for Cost Reduction and Optimization for Manufacturing and Industrial Companies
"In this introductory book, Berk not only takes a modern, all-inclusive look at manufacturing processes but also provides substantial coverage of engineering materials and production systems. It follows a more qualitative and design-oriented approach than other texts in the market, helping readers gain a better understanding of important concepts. They'll also discover how micro-economic conditions relate to the process variables in a given process as well as how to perform manufacturing science and quantitative engineering analysis of manufacturing processes."
—Fred Silverman, Director Engineering of Hi-Shear Technology Corporation
"Joe Berk has created a unique, practical and straightforward approach to cost reduction in manufacturing. This work provides valuable insights and concrete techniques, based on real-world experiences, to any manufacturing organization undertaking change to position itself to compete successfully in the global marketplace."
—Joe Carleone, President and COO of American Pacific Corporation
Check out author Joseph Berk's blog at http://manufacturingtraining.wordpress.com/
The Little Book of Common Sense Investing is the classic guide to getting smart about the market. Legendary mutual fund pioneer John C. Bogle reveals his key to getting more out of investing: low-cost index funds. Bogle describes the simplest and most effective investment strategy for building wealth over the long term: buy and hold, at very low cost, a mutual fund that tracks a broad stock market Index such as the S&P 500.
While the stock market has tumbled and then soared since the first edition of Little Book of Common Sense was published in April 2007, Bogle’s investment principles have endured and served investors well. This tenth anniversary edition includes updated data and new information but maintains the same long-term perspective as in its predecessor.
Bogle has also added two new chapters designed to provide further guidance to investors: one on asset allocation, the other on retirement investing.
A portfolio focused on index funds is the only investment that effectively guarantees your fair share of stock market returns. This strategy is favored by Warren Buffett, who said this about Bogle: “If a statue is ever erected to honor the person who has done the most for American investors, the hands-down choice should be Jack Bogle. For decades, Jack has urged investors to invest in ultra-low-cost index funds. . . . Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me.”
Bogle shows you how to make index investing work for you and help you achieve your financial goals, and finds support from some of the world's best financial minds: not only Warren Buffett, but Benjamin Graham, Paul Samuelson, Burton Malkiel, Yale’s David Swensen, Cliff Asness of AQR, and many others.
This new edition of The Little Book of Common Sense Investing offers you the same solid strategy as its predecessor for building your financial future.Build a broadly diversified, low-cost portfolio without the risks of individual stocks, manager selection, or sector rotation. Forget the fads and marketing hype, and focus on what works in the real world. Understand that stock returns are generated by three sources (dividend yield, earnings growth, and change in market valuation) in order to establish rational expectations for stock returns over the coming decade. Recognize that in the long run, business reality trumps market expectations. Learn how to harness the magic of compounding returns while avoiding the tyranny of compounding costs.
While index investing allows you to sit back and let the market do the work for you, too many investors trade frantically, turning a winner’s game into a loser’s game. The Little Book of Common Sense Investing is a solid guidebook to your financial future.
Rifkin uncovers a paradox at the heart of capitalism that has propelled it to greatness but is now taking it to its death—the inherent entrepreneurial dynamism of competitive markets that drives productivity up and marginal costs down, enabling businesses to reduce the price of their goods and services in order to win over consumers and market share. (Marginal cost is the cost of producing additional units of a good or service, if fixed costs are not counted.) While economists have always welcomed a reduction in marginal cost, they never anticipated the possibility of a technological revolution that might bring marginal costs to near zero, making goods and services priceless, nearly free, and abundant, and no longer subject to market forces.
Now, a formidable new technology infrastructure—the Internet of things (IoT)—is emerging with the potential of pushing large segments of economic life to near zero marginal cost in the years ahead. Rifkin describes how the Communication Internet is converging with a nascent Energy Internet and Logistics Internet to create a new technology platform that connects everything and everyone. Billions of sensors are being attached to natural resources, production lines, the electricity grid, logistics networks, recycling flows, and implanted in homes, offices, stores, vehicles, and even human beings, feeding Big Data into an IoT global neural network. Prosumers can connect to the network and use Big Data, analytics, and algorithms to accelerate efficiency, dramatically increase productivity, and lower the marginal cost of producing and sharing a wide range of products and services to near zero, just like they now do with information goods.
The plummeting of marginal costs is spawning a hybrid economy—part capitalist market and part Collaborative Commons—with far reaching implications for society, according to Rifkin. Hundreds of millions of people are already transferring parts of their economic lives to the global Collaborative Commons. Prosumers are plugging into the fledgling IoT and making and sharing their own information, entertainment, green energy, and 3D-printed products at near zero marginal cost. They are also sharing cars, homes, clothes and other items via social media sites, rentals, redistribution clubs, and cooperatives at low or near zero marginal cost. Students are enrolling in free massive open online courses (MOOCs) that operate at near zero marginal cost. Social entrepreneurs are even bypassing the banking establishment and using crowdfunding to finance startup businesses as well as creating alternative currencies in the fledgling sharing economy. In this new world, social capital is as important as financial capital, access trumps ownership, sustainability supersedes consumerism, cooperation ousts competition, and "exchange value" in the capitalist marketplace is increasingly replaced by "sharable value" on the Collaborative Commons.
Rifkin concludes that capitalism will remain with us, albeit in an increasingly streamlined role, primarily as an aggregator of network services and solutions, allowing it to flourish as a powerful niche player in the coming era. We are, however, says Rifkin, entering a world beyond markets where we are learning how to live together in an increasingly interdependent global Collaborative Commons.
Target Costing Objectives:Identify the cost at which your product must be manufactured at if it is to earn its profit margin at its expected target selling price.Break the target cost down to its component level and have your suppliers find ways to deliver the components they sell you at the set target prices while still making adequate returns.
The connection to function: An organized effort and team based approach to analyze the functions of goods and services that the design stage, and find ways to achieve those functions in a manner that allows the firm to meet its target costs.
The result: Added value for your company (development costs on-line with added value for your company; development costs on-line with selling prices) and added value for your customer (higher quality products that meet, possibly even exceed, customer expectations.)