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After green buildings and environment-friendly complexes, it is the turn of large establishments in the manufacturing sector, IT services companies and small and medium enterprises across various sectors to take to the movement, adopting the total cost management model developed by the Godrej Confederation of Indian Industry-Green Business Centre (CII-GBC).
“A unique initiative of the CII-GBC, the Total Cost Management (TCM) Maturity Model is the first of its kind developed anywhere .
This is being studied keenly by Harvard University and also people such as management guru Mr Robert Kaplan,” says Mr K. V. Mahidhar, Head, CII-TCM Division.
Speaking to Business Line , Mr Mahidhar said that this model calibrates the maturity level in cost management through five layers, with differentiating characteristics at each layer. The division has rated more than 45 companies and there is growing engagement of CII GBC as an advisor and a consultant in their quest to adopt best practices.
The CII has established the TCM division under the chairmanship of Mr S. Mahalingam, Chief Financial Officer of TCS, along with a panel of internal and external experts.
This achieves significance, considering the importance of the cost management process as the heart of cost-competitive strategies across various sectors in the industry.
“The strategic benefits accrued through the model are cost management practices, which have been identified after considerable study, and works with experts from different domains. The levels are rated as minimal, functional, operational, TCM-enabled and exemplary in today's cost-competitive pressures,” Mr Mahidhar said.
BENEFITS
According to CII's assessment, it could lead to benefits of up to 5 to 10 per cent. For example, in the case of a student who gets 40-50 per cent marks, it may be possible to help him increase it to say 60 or 70 per cent. But for someone who gets 90 per cent, it may be hard to improve it further to say 90-95 per cent. That analogy works even here, he said.
A wide variety of companies ranging from the auto sector, information technology and those in the manufacturing are adopting this model. Among those actively engaged in the process are Kirloskar Brothers, Subros Ltd, Godrej & Boyce Mfg. Co, Amara Raja Batteries, ITC, Wipro and ITW Signode among others. These companies are motivated to achieve these levels as there is a tangible benefit in the long run.
According to estimates, if the green features, that is, the energy saving aspects, are factored in at the concept stage, there is direct saving of nearly 5 per cent in the general execution, as compared to planning this after setting up a centre. The latter could mean higher cost of nearly 10 per cent.
In the case of Wipro, in one of its centres, it was estimated that they consumed 51 lakh units per annum before this initiative.
Later, this was down to 31 lakh units. If one company benefits, and there are case studies, others would love to take pride in following suit and possibly highlight them in their balance sheets too.
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