E Pluribus Unim – out of many, one.
Today we celebrate the Declaration of Independence. We mark the birth of the United States of America from July 4th 1776. But that was early in the war for independence from the British Empire.
Even after the American Revolution ended, the 13 states operating under the Articles of Confederation was not a sustainable situation. It was not until the U.S. Constitution was drafted that our country’s enduring structure was created. This structure included the amendment process that led to the freedom of slaves, voting rights for the disenfranchised, and other changes toward the goal of “Liberty and Justice for all.”
Maybe I am stretching the point a little, but our federal government coming together out of thirteen independent states reminds me of a project several years ago. The company was considering consolidation of twenty different segments of products being from multiple copackers into one central location. But after the proposals were in and analysis done, the project was not meeting the company’s hurdles. I worked with finance to analyze payback and return separately for each of the twenty separate segments. Eleven of the segments could meet hurdles independently. A twelfth segment had synergies.
We put these twelve segments together into one project and dropped the other eight. Out of the many, we were able to combine some into one that worked. For more on this project – see case study.
This kind of analysis is good practice for a company that is seeking to optimize return on their capital investments. One project can be broken into many components and analyzed separately to maximize return on investment. Most capital projects have multiple options of different scopes or solutions. Projects are often like bills in Congress with riders attached for things that the submitting plant or division desires, which often do not actually add to the return. Breaking the project into components and options and analyzing the return for each will help focus the best investment of a company’s limited capital budget.
