#1 Problem We Solve: Cost Optimization
In order to increase the shareholder value-added (SVA) share of investments and portfolio companies, Forsyth Advisors annualizes cost reductions to produce excess operating profits and free up cash. The standardization of ‘the right costs for the right products’ leads to the achievement of higher EBITDA margins.
With high cost pressure, an extensive supply chain, low resources, rapid change with new technologies and materials – buyers are challenged in value chain management. At the same time, the potential for value creation lies in the high proportion of purchased components. We specialize in taking advantage of market fluctuations and price variations to eliminate the obscurity of price, optimize shareholder value, improve supplier negotiations, and maximize cost savings.
All sorts of factors affect operating costs.
A should-cost analysis allows the organization to estimate the product cost before an RFP is issued, providing a benchmark against which to measure competitive bids. It helps buyers understand the supplier’s cost structure and negotiate with suppliers collaboratively. A well-executed should-cost analysis can form the backbone of a long-term, mutually beneficial supplier relationship.
For our clients, identifying should-cost along with detailed process data helps source components more strategically, anchor supplier negotiations in quantitative data and industry knowledge, and model procurement costs without waiting for supplier quotes.