Sometimes it’s helpful to know what other people are asking about. You might have the same or similar questions.
Is now the right time for a price increase/decrease?
As economic activity picks up, we
expect there will be new opportunities for price increases that were not
feasible in the tough pricing environment of the past few years. We generally
advise clients to consider three things above all others when considering a
1) how price-sensitive are consumers,
2) what are current and future projected cost trends,
3) are key competitors likely to follow your pricing action.
Are manufacturing cost standards accurate?
If actual manufacturing costs are consistently coming in above or below the cost standards that your company has set, that is probably an indication that the standards need to be revised. Standards need to be sufficiently detailed so that the reason for variances (e.g., manufacturing yields, efficiencies, labor, material pricing, product mix) can be understood by the person or departments accountable, and future adjustments made. We have expertise in this area and can help.
What can we do about under-performing assets?
There are so many possibilities with under-performing assets, it’s hard to generalize. We’ve seen instances where eliminating slow moving items can improve returns for a product line. We prefer to see plants running at 80 to 90% capacity. In our experience that usually maximizes return on assets.