Unit Cost

Although a simple concept, effective management of unit cost is often an elusive expectation in many organizations because of a lack of understanding of, and accessability to  all of the variable drivers that affect cost and optimization.  For managers to effectively manage unit cost and total resource usage, they must have a clear view  to total costs, including costs considered fixed or “free” such as equipment and capital assets. Organizational silos add to the complexity of optimizing unit costs since each silo  works on its optimization to the detriment of  the whole.

Our decades of experience  implementing holistic solutions to total cost optimization with alignment to output and through put in goods or services has become  a Brooks core competency.  Our expertise in effective management and improvement in unit costs delivers increased profitability for our clients. Brooks' areas of expertise in improving unit cost includes Lean Six Sigma, advanced manufacturing, maintenance effectiveness, asset utilization/ and optimization, knowledge worker productivity, engineering and manufacturability, purchasing and sourcing, G&A optimization, and inventory and logistics management.

Brooks begins with a deep and detailed assessment of the current state with identification of the issues and barriers that limit attainment of strategic performance improvement. The assessment findings are used to  create a tailored approach for change (the BluePrint) which  prioritizes and addresses the requite solutions. Although technical solutions and process changes can deliver incremental improvements, step change improvements require a fully integrated approach that aligns the organization from top to bottom and across functional areas to specific strategic goals and objectives, establishes proper roles and responsibilities by position, and implements  an overarching management system that actualizes the changes and embeds the behaviors for continued and sustained improvements in cost and output.  This approach  delivers  increased profitability and earnings with improved quality and customer service.

Illustrative results of Brooks’ value in
reducing unit cost include the following:

  • $6.2 million annual increase in gross operating profits for a national iron pipe manufacturer
  • 3 percent reduction in cost per delivered well or $8 million per improvement for a major North American natural gas producer
  • $38 million annual improvement through a 9 percent improvement in asset utilization for a major Class I railroad