Consultants Forum   |   FacilityLocations    |   FastFacility    |   Advertise   |   Subscribe   |   Newsletter   |   RSS RSS
Area Development
Archives
Current Issue
State Resources
  
Topics
Asset Management
Business Globalization
Economics/ Government Policy
Energy/Sustainable Development
Labor/Education/HR
Logistics/Infrastructure
Site Selection/Facility Planning
Taxes/Incentives
Special Presentations
Annual Corporate & Consultants Survey Results
Annual Gold Shovel Economic Development Awards
Economic Developers Directory
Leading Metro Locations
Top Site Selection Factors
Top States for Doing Business
Market Reports
Aerospace
Automotive
Biotech
Food Processing
High Tech/Nano/Electronics
Medical/Pharmaceutical
Other Industries
Plastics
Inward Investment Guides
Location Canada
Location USA
Departments
Front Line
International Location Reports
Location Notebook
News Items
Studies/Research/Papers
U.S. Regional Reports
Viewpoint
Services
Consultants Forum
Newsletter  |  RSS RSS
Subscribe to Area Development Magazine
Advertise
About Us
Contact
Related Sites
FastFacility
FacilityLocations
Consultants Site Guide
FastGIS
Newsletters
Email Address*
Primary Industry
Area Development Homepage >> Studies/Research/Papers >>
It's time to circle the supply chain wagons: Should you start by cutting costs or cutting revenue?
Deloitte (12-15-2008)
 
In a downturn, most companies immediately focus on cost reduction. That could be a mistake, according to Frank Burkitt, a principal with Deloitte Consulting LLP.

"To make smart cuts to your supply chain, you should first understand which elements represent the core of your business," said Burkitt. "Which customers are the most profitable and which are expendable? Which products do customers truly care about and which are just window dressing? What level of service quality do key customers need and expect?

"Ironically, the best way to start cutting costs may be to start cutting revenue -- specifically the 'bad' revenue that undermines profitability. Decide which revenue streams are not worth preserving and then target cost reductions," said Burkitt.

The idea of cutting revenue in a downturn might seem crazy, but simply put, some customers are not worth serving and some products are not worth selling. The shrinking margins that accompany an economic slowdown often only make the problem worse. Executives need to use top-down revenue cutting and bottom-up cost cutting approaches.

 
X
Save/Share Article
More
Email Email
Print
ASK AREA DEVELOPMENT
Have questions, comments or concerns about this article? Submit to Ask Area Development here and the author or an expert from our network of site selection and facility planning professionals will answer:
News Items
 
Around The Web
 
Studies/Research
News Items
 
Around The Web
 
Studies/Research
DD Dannar Invests $4.65 Million In Muncie, Indiana, Production Facility, Headquarters
06/19/2013
Austrian-based Diamond Aircraft Industries Plans Partnership With Embry-Riddle Aeronautical University In Daytona Beach, Florida
06/19/2013
Lindoerfer + Steiner GmbH establishing new facility in Spartanburg, South Carolina
06/19/2013
IOMAX USA Invests $1.75 Million To Expand Its Mooresville, North Carolina, Operations Facility
06/19/2013
Shambaugh & Son Invests $4.37 Million To Expand Its Fort Wayne, Indiana Headquarters
06/19/2013
Vacuworx Invests $10 Million To Expand Its Tulsa, Oklahoma facility
06/19/2013
Blue Diamond Opens Turlock, California, Almond Products Manufacturing Plant
06/18/2013
AddThis Feed
Email Tips: Send Us Business Expansion or Relocation News
<< More Recent Next >>
PwC’s 1st Quarter Manufacturing Barometer Reflects Increased Optimism
Area Development Online Research Desk
Win-Win Outcomes: Public-Private Teamwork Boosts Manufacturing Competitiveness
Area Development Online Research Desk
2013 Gold Shovel Awards: Recognizing Excellence in U.S. State Economic Development
Area Development Magazine Special Presentation
Leading Locations for 2013: Ranking MSAs for Economic & Job Growth
Area Development Magazine Special Presentation
C-Level Executive Survey: U.S. On Par with Mexico as a Preferred Nearshoring Destination
Area Development Online Research Desk
The Five Overarching Trends Affecting Global Corporate Real Estate
Area Development Online Research Desk
27th Annual Survey of Corporate Executives: Changing Site Selection Priorities
Area Development Magazine Special Presentation
Growing Challenge of Supply Chain Risk Must Be Addressed
Area Development Online Research Desk
The Return of Technology Clusters to the List of “Best-Performing Cities”
Area Development Online Research Desk
Barometer Shows Optimism Among U.S. Manufacturers
Area Development Online Research Desk
All Studies/Research/Papers
State Resource map
Click on any state for links to current state news and data, contact directory, corporate taxes, financial and business incentives, credits, grants and available buildings and sites
State Resource Sponsor