Strategies for Enhancing Asset Productivity

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1、OPERATIONSMANAGEMENTROUNDTABLEDecisionSupportMemorandumDecember2001StrategiesforEnhancingAssetCONTENTSProductivityOverviewofCurrentPracticeTWENTYYEARDECLINEINRETURNSOnecompany’sreturnsfallTraditionally,firmshavefocusedonGROWTHDRIVESBUSINESSdramaticallyasassetturnsdeclinegeneratinggrowthacrossb

2、usinessSTRATEGY(Page2)2.514%units.Assustainedgrowth12%2becomescostly,however,someShortcomingofCurrentPracticeAssetTurns10%1.58%assetclassesunderminevalueBALLOONINGASSETS16%creation.CompaniesincreasinglyReturnsDIMINISHSHAREHOLDER4%0.5mustfocusonassetproductivityasV2%ALUE(Pages3-4)00%adriverofre

3、turnsandshareholder14710131619Yearvalue.MemberImperativesSource:BostonConsultingGroup(1999)HEEDTHEBALANCESHEET(Pages5-6)ExecutiveSummaryAdvancedPracticesCREATINGVALUEPRACTICEPROFILESTheDilemmainBrief(Pages7-11)Manyofcompanies’recenteffortstoimproveassetproductivityhavebeenstymiedbycompanies’re

4、lentlessfocusongrowth,aninabilitytoefficientlystructureassetmanagement,andanunwillingnesstocriticallyevaluateassetsthatfailtogeneratevalue.Companiesshouldcriticallyevaluateassetclasses,withparticularattentiontotheroleofeachassetclass,theimpactofassetproductivityonshareholdervalue,andtheconfigu

5、rationofanorganizationalstructurethatfacilitatesassetproductivity.StepstoConsiderOperationsManagementRoundtableresearchindicatesthatthemostdramaticimprovementsinassetproductivityresultfromacombinationofapproachestoassetclassesandassetmanagement.Specifically,manyleadingfirms:Appendices·Linkasse

6、tproductivitytoshareholdervalue:ShareholdervaluemanagementRESEARCHPROCESS(Page12)strategiesshouldaccountnotonlyforgrowth,butalsoforprofitability.OptimizingBIBLIOGRAPHY(Page13)assetproductivityallowsacompanytogenerateprofitwhileavoidingthevaluenegationofunnecessaryorexcessgrowth.·Understandinte

7、ractionsbetweenassetclasses:Assetclassesareinterdependent;thedecisiontoinvestinonesetofassetsmayproducelessdesirableperformanceinanotherarea.Companiesshouldaligntheirassetswithcompanypriorities,andreengineercapitalallocationtomaximizere