June 03, 2009
BEACHWOOD, Ohio - Many companies bringing products to market during this recession are walking a thin tightrope: cut back enough to manage the bottom line, and at the same time invest in the right products that will drive future growth. It's critical to know exactly where to cut, so there are funds to reinvest. After all, a company typically generates 120 percent of its profits from just 20 percent of its most productive products, and the bottom 20 percent can erode up to 80 percent of product potential.
"Companies in today's economy have been faced with the need to cut, and are often cutting across the board instead of identifying and eliminating non-strategic and low-value products," said George Young, a founding partner of Kalypso. "With a strategic Complexity Management initiative, companies can eliminate low profitability products and drive upwards of five points of profit growth as a result."
Kalypso, the world's premier innovation consulting firm, has been leading the field of Complexity Management practices and methodology. In the process, it has helped clients to achieve savings ranging from $13.5 million to $100 million. Now Kalypso has captured those best practices in the new Kalypso Complexity Management service launched last week.
Kalypso's Complexity Management methodology addresses the complete range of complexity management issues that companies face today, including eliminating under-performing products and services, reducing complexity across the organization and throughout the supply chain, and diminishing unprofitable customer segments. By employing Kalypso Complexity Management, companies can strategically reduce low profitability areas from their product portfolio and R&D pipeline and reinvest the savings into driving innovation and profitable sales growth.
"The goal is to determine how to reduce organizational complexity and spending without hurting your future," said Young. "Complexity Management is helping clients innovate and grow through an economic downturn."
For more information about Kalypso's Complexity Management service, visit http://www.kalypso.com/capabilities/services/complexity-management.