Consulting and coaching on the implementation of tertiary cost management

Problems solved for enterprises

 1. Enhance cost control capability: Establish a "three-level cost control" system to achieve stable and controlled on-site costs

By establishing a "three-level cost control" mechanism that covers the strategic, management, and operational levels, Shangshucei Consulting helps enterprises integrate cost management throughout the entire production and operation chain. This system not only strengthens the grassroots' sensitivity and control ability towards costs (such as daily cost monitoring at the team level), but also reduces the uncertainty of human intervention through institutionalized process design (such as cost accounting standards and abnormal feedback mechanisms), thereby leveraging "small costs" to achieve "big benefits" and achieving twice the result with half the effort in grassroots cost management.   

 2. Forcing innovation and improving capabilities: Promoting continuous improvement through high-frequency tracking and analysis

For core product costs at different levels (monthly for factory-level and above, daily for workshop-level and below), Shangshucei Consulting accurately identifies the differences from the target (or standard) unit costs through systematic tracking and analysis, and focuses on in-depth analysis of abnormal products. This process not only reveals the root causes of cost fluctuations (such as process waste and low equipment efficiency), but also drives enterprises to make comprehensive improvements from technological innovation, process optimization to job practice through a closed-loop management of "problem-improvement-verification".

 3. Monitor performance and track costs: Drive efficiency improvement through decomposition of technical and economic indicators

Through layered decomposition of the main technical and economic indicators of the production line (such as yield rate, energy consumption, equipment utilization rate, etc.), Shangshucei Consulting helps enterprise managers transform cost pressure into motivation for improvement. By continuously tracking the progress of indicator improvement, it promotes the dynamic updating of production line technical and economic indicators (such as moving from "meeting standards" to "exceeding industry benchmarks"). Combined with the "compete, learn, catch up, help and surpass" mechanism among teams, it stimulates employees' enthusiasm for actively participating in cost control.

Our services

Step 1: Establish a cost management team and improve management institutions and mechanisms

The implementation of TPM (Total Productive Maintenance) requires an organizational restructuring as a foundation. Shangshucei Consulting assists enterprises in establishing a cross-departmental cost management team (such as a three-tier linkage between the factory department, workshop, and team), clarifies the responsibilities of senior leaders, and ensures the coordination and implementation of cost control activities through system design (such as responsibility division tables and communication and collaboration rules).   

 Step 2: Establish a three-tier cost management system, along with supporting processes, regulations, and incentive and disciplinary measures

With "three-level cost control" as the core, we assist enterprises in constructing a comprehensive system encompassing strategic decision-making, process supervision, and on-site execution. By designing standardized processes (such as cost accounting, anomaly analysis, and improvement verification), institutional norms (such as cost target decomposition rules and resource allocation criteria), and implementation details (such as monthly/daily analysis templates), we ensure the operability of cost management activities. Simultaneously, we introduce performance evaluation mechanisms (such as cost improvement KPIs) and accompanying reward and punishment measures (such as cost savings incentives and a responsibility tracing system) to promote full participation.   

 Step 3: Establish a tertiary cost management and lean project, as well as a mechanism for transforming job innovations

The essence of TPM lies in "total involvement and continuous improvement". Shangshucei Consulting deeply integrates tertiary cost management with lean projects (such as 5S and TPM self-maintenance) and job innovation (such as micro-innovations proposed by frontline employees), ensuring that the results of cost control can be implemented through specific projects and transformed into employees' innovation capabilities.

 Step 4: Train employees and guide the implementation of projects

The success of TPM relies on the continuous improvement of employee capabilities. We offer tiered and practical training programs (such as strategic training for management and operational training for frontline employees), accompanied by project coaching (such as guiding teams to complete cost improvement projects), to ensure that employees not only understand the theory of cost control but also master the tools and methods.   

 Step 5: Improve the cost reduction management mechanism and implement cost reduction measures

In response to the cost reduction needs of enterprises, Shangshuce Consulting has institutionalized and normalized cost reduction management through specific measures such as optimizing resource allocation (e.g., reducing reliance on outsourced maintenance), enhancing equipment efficiency (e.g., reducing failure rates through preventive maintenance), and improving process flows (e.g., eliminating mold change losses).

 Step 6: Establish a company-level KPI and KAI Kanban system

We assist enterprises in building visual management tools, such as company-level KPI dashboards (including core indicators like Overall Equipment Effectiveness (OEE) and unit cost) and KAI (Key Action Item) dashboards (featuring key improvement tasks, responsible individuals, and progress). By leveraging data-driven decision-making, we facilitate cross-departmental collaboration and enhance management transparency. The goal of this phase is to elevate cost control from an "activity" to a "culture", promoting the normalization of continuous improvement.