Capital markets demand capital-efficiency focused management from modern businesses, and Return on Invested Capital (ROIC) has become an important indicator.
On the other hand, spreading ROIC-based management is no simple matter. In order to promote it, portfolio management alone is not sufficient, and a framework for performance management must be developed as well. Especially at companies with strong operations departments and weak corporate divisions, getting penetration into actual work sites for ROIC-linked performance management frameworks to people on the ground requires very difficult initiatives.
As a two-part special, this Insight shares an approach for both the corporate division and on-site workplace to resolve issues together, breaking down inter-departmental barriers to the penetration of ROIC management. This material is intended for corporate planning departments and other corporate division spearheading ROIC management initiatives.
Part one will share mainly challenges and handling methods from the perspective of corporate division and operations department interconnection. Part two will introduce approaches from the supply chain management perspective.