Reduction of capital expenditures
- Capital expenditures (Capex) is a big amount of cash that every year leaves your bank accounts, depending on the business we see 3-10% of revenues that is invested in an average year, excluding R&D. This is an important lever to be pulled to increase your company’s profit! The good news is that a big portion of this money can be saved, without harming your company and your employees.
- Two types of Capex are to scrutinize in your Operations: recurring Capex and occasional Capex. Recurring is the one to spend every year to maintain your current business and keep the value of your physical assets. Occasional Capex is needed when you plan to expand in a new region or introduce a new product, or just update technology for a substantial improvement in performance.
- Recurring Capex projects are many and rather small. Our solution is based on a quick fact-based scan to prioritize each project and create a solid decision base to help you select what can be postponed, canceled or should be executed.
- Occasional Capex projects are typical few large projects where is important to go deep and investigate the business case and the design to avoid the risk of “gold-plating”. Our solution called MINIMAX goes inside the design to challenge all the elements that don’t add value to the project, by first creating a new “skeleton” technical solution and then consciously adding back only those elements that increase the project’s profitability in its lifetime.
- Many companies claim to be good in managing investments because the projects are delivered within budget and time. We don’t call this good, we just call it average: what do you need to be much better than your competitors?
- We at Growing have helped other companies to find Capex savings in projects of any size, from 30 to 20000 mUSD. Our “lean Capex” team is the perfect complement to your business and technical team, to unlock millions of non value-add money in your projects.