Total Operational Cost and outsourced operations model
Cost is increasingly considered a strategic weapon in hypercompetitive industries such as the hi-tech electronics and consumer goods industry.

As cost captains, Operations executives have attacked operational costs in many ways. Manufacturing operations and even significant chunk of design and engineering operations have been outsourced. This has significantly reduced structural costs eliminating manufacturing assets and direct labor costs. Manufacturing and Operations teams have also been trimmed.

Lean principles have been adopted and several software technologies ranging from Supply Chain Planning to internet-enabled supplier collaboration tools and intranets have been deployed.

Any more opportunities to reduce Operational Cost
So, has Operational cost reduction run its course? Are there no major opportunities to pare down costs? The answer is a resounding no.
Although, the new outsourced operating model (using EMS/ ODM partners) has resulted in measurable cost savings, new challenges have emerged, such as

• Unpredictable shortages
• Unplanned inventory liabilities
• Poor visibility and control of product cost

These directly translate into higher product costs offsetting some of the gains due to outsourcing. While some of the costs are uncontrollable many are not.

What is 'Lifecycle Cost Management’? Can it help?
Lifecycle Cost Management is a structured, multi-disciplinary approach focused on the reduction of ‘Total operational cost’ by identifying new opportunities to reduce controllable costs. With expanding line of products and increased outsourcing, Operations executives do not have all the cost information on their fingertips as they used to before. This approach allows cross-functional teams in companies to work effectively across functions and with external partners (CM, ODM) traversing artificial organizational, process and system boundaries to drive down operational costs further taking an innovative lifecycle approach to managing total cost.

Zyom can reduce Total Operational Cost
Zyom is the only company with a focused offering encompassing process improvements and software tools & services that uses an 'Lifecycle Cost Management’ approach. Zyom’s innovative solutions leverage advances in:

• Supply Chain constraint management and optimization
• LifeCycle management and
• Cost engineering

to uncover and capitalize on new opportunities to control Total Operational Cost thereby enhancing product profitability. Zyom has directly helped large and small companies reduce operational costs by leveraging its innovative combination of consulting services and software services.