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Put Every Asset To Work On The Bottom Line

Does your organization have space it could lease to supplier? You could solve two problems at once: generate capital for unused assets while reducing delays in fulfillment. This is exactly what Boeing is doing with Giddens Industries (a specialized parts supplier to Boeing in Everett WA).

At least once a year go over your asset utilization. If you are under utilizing or plain not using certain assets at all, consider leasing them to strategic partners. Look for companies who will benefit your organization for the use of the asset -- whether manufacturing equipment, office space, or even specialized expertise.

Even providing these assets at a market discount (but reasonable profit) you keep them available for future use. For heavy equipment you can lease a percentage of your support staff to maintain these items -- these hybrid material/service contracts can keep your company strong through hard times.

Focus first on partners who directly support your organization. Look at aspects of reducing their costs and passing along those savings to your organization.

Some examples of putting unused assets to work for your business relationships:

• Leasing specialized manufacturing equipment to a low end provider in your marketplace in exchange for customer segmentation. The low-end provider benefits from more cost effective manufacturing, and you get to focus on a more profitable premium customer.
• Selling unused computing time and related support services to a pharmaceutical company for cash. High end servers that usually sit idle over weekend become heavy resources for research and development with little impact on your business. You get the capital return and billable hours for staff.
• Provide discount warehouse space to a materials supplier in exchange for lowering delivery fees and a 24-hour turn around. You get the materials on-hand and generating income from unused space, while your partner gets a distribution point for other businesses they serve in your area.

While many of these measures are temporary, they could open the way to profitable long-term relationships if properly managed. This type of relationship can be especially useful if it can reduce the costs of your partners while generating income on idle assets. What value can you produce from assets your not using?

/ grow-products | partner-relations /

By Justin Hitt at July 24, 2003 1:44 PM  Subscribe in a reader