Cost Management

Millennium Ventures mission is to provide the customer of a portfolio company with a product that would be their best investment. The firm would look at opportunities to develop this competitive advantage through superior operations. This can be accomplished by improving its core business processes. The firm would acquire a company with such opportunities.

Strategic Procurement :

Typically, 50-60% of the cost structure is material supplies.  This cost can be reduced by the following three key tactical plans:

  • Outsourcing non-core manufacturing for low cost
  • Consolidate volumes and suppliers for reduced prices
  • Leverage bargaining power and negotiate more value-add further down the supply chain

Working Capital Reduction :

Asset turns can be improved to provide more sales from less money tied in the business.  This could be achieved by applying three key tactics:

  • Reduce average receivable days to 30 days or less
  • Improve inventory turns by selective stocking of low cost products with less variable demand

Stretch selective payables to move average closer to 60 days payables with minimal penalties

Flexible Manufacturing :

Low value add work in the shop can be reduced to improve labor, machine and space utilization.  Sales growth can be accomplished with low capital expenditure.  The firm will be looking for opportunities to apply three key tactics:

  • Reduce manufacturing setup times, machine downtime, material scrap and rework
  • Synchronize production flow using just-in-time principles
  • Reduce non-value add ship, pick and move operations by improving forecasting and production scheduling

Intelligent Product Development :

Profitability can be greatly enhanced by designing in higher gross margins.  This can be achieved by implementing three key tactical plans:

  • Reduce cost by de-featuring, re-specification and standardization
  • Simplify designs for low cost manufacturing / assembly and off-the shelf supplies
  • Reduce development cost and improve product for high revenue by streamlining
    development process

Product Management :

Improvement in project management process is imperative to achieve aggressive goals in an organization.  The will consider three key tactics to improve management:

  • Ensure cost structure to be in line with revenues
  • Design / align management incentives and implement performance measurement systems for all levels
  • Training for effective management practices – team building, time management and leadership