Author:LairdReedReviewers:SarahMillard,JasonTrevisonbcBDPMarch1998Copyright©1998Bain&Company,Inc.2CU7122997KRAbcBOSCopyright©1998Bain&Company,Inc.BDPAgenda•TheBestDemonstratedPractices(BDP)Concept•Applications•BDPSteps•ClientExample•KeyTakeaways3CU7122997KRAbcBOSCopyright©1998Bain&Company,Inc.BDPAgenda•TheBestDemonstratedPractices(BDP)Concept•Applications•BDPSteps•ClientExample•KeyTakeaways4CU7122997KRAbcBOSCopyright©1998Bain&Company,Inc.BDPDescription*WhereasanRCPalwaysdealswithcosts,aBDPcoulddealwithcostsorrevenuesBDPisusedtoidentifythebestpractices-thoseleadingtothemostrevenueattheleastcost-insideoforoutsideofacompany.BDP-practicesleadingtothemostrevenueattheleastcost*InternalExternalBetweenorganizationsHistoricalCompetitorsCompaniesindifferentindustries5CU7122997KRAbcBOSCopyright©1998Bain&Company,Inc.BDPInternalvs.ExternalInternalBDPsaremorestraightforwardtoconductthanareexternalBDPs,buttheytendtoleadtolessdramatic,thoughoftensignificant,change.Gatheringdata:Degreeofchange:BDPInternalExternalBetweenorganizationsHistoricalCompetitorsCompaniesindifferentindustriesStraightforwardContinuousimprovementDifficultDramaticchange6CU7122997KRAbcBOSCopyright©1998Bain&Company,Inc.BDPPossibleReasonsforBetterPerformance•Moreconsolidatedsupply(VMRs)•Lowercostrawmaterials•Higherqualityrawmaterials•Morepartsoutsourced•Morepartsmadeinlower-costcountriesProducts•Simplerproducts•FewerproductvariationsPlants•Fewer,morehighly-focusedplants•Moreefficientproductionprocess(longerruns,lesswaste)•Betterequipment•BetterqualitycontrolLabor•Longer-termcontracts•Betterstructuredincentives•Bettersupervisor-to-laborratioFollowingisalistofpossiblereasonssomecompaniesperformbetterthanothers:PurchasingManufacturingDistributionSelling•Betterdeliverymethod(truckvs.trainvs.airplane)•More(orless)frequentdeliveries•Larger(orsmaller)deliverysizes•Bettertrainedsalesforce•Largersalesforce•Betterorganizedsalesforce(byregion,byproduct,byindustry)•Betterstructuredincentives7CU7122997KRAbcBOSCopyright©1998Bain&Company,Inc.BDPBDPinTheoryIntheory,byapplyingBDPpractices,youcouldcreateaBDPcompany.PurchasingManu-facturingDistributionSellingCorporatePurchasingManu-facturingDistributionSellingCorporatePurchasingManu-facturingDistributionSellingCorporateClientCompetitorACompetitorBBDPCompanyNon-BDPBDP8CU7122997KRAbcBOSCopyright©1998Bain&Company,Inc.BDPBDPinPracticeInpractice,BDPanalysisisusedonlyinareasofthecompanywhereitcanhaveasignificantimpact.ManufacturingBDPSalesforceBDPNon-BDPBDPSituation:BeforeBDP:AfterBDP:CorporatePurchasingManufacturingDistributionSellingCorporatePurchasingManufacturingDistributionSellingManufacturingcostsareasignificantportionoftotalcosts,andtheclientisfarfromBDPinmanufacturing.Revenuepersalesrepresentativeisamajordriverofprofitability,andtheclient’ssalesrepresentativesarefarfromBDPinrevenueperrepresentative.CorporateCorporateActions:•Purchasenewequipment•Rearrangeequipmenttoimproveproductionflow•Recyclewaste•Decreasesupervisortolaborratio•Increaseamountoftraining•Reorganizesalesforcebyindustry•Restructureincentivestoencouragecross-selling9CU7122997KRAbcBOSCopyright©1998Bain&Company,Inc.BDPReasonsforUsingBDPBecauseBDPissimple,pragmatic,andpositive(itfocusesonwhattheclientdoesbest),ithelpsusachieveresults.BDPhelpsusachieveresultsSimplePragmaticPosit...
