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Cost-Out

opportunity + innovation = competitiveness

 

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With the global economy set for a significant reset, cutting costs has become essential to survival for many organisations. But too often, a short-term focus on cash flow and liquidity can reduce innovation and long-term competitiveness.

It’s one thing to be good at cost-cutting; another entirely to be able to turn cost optimisation into enhanced and enduring competitive advantage.

Six dimensions of cost-out maturity

There are six vital dimensions to cost control. The better an organisation is at all of these, the more successful its cost optimisation will be. We’ve found that failing to give just one dimension enough attention can lessen the impact of your efforts across the others.

 

Strategy

Company-wide cost-out vision that integrates target setting and reward

Organisation & governance

Cross-functional cost-out team and fully empowered programme leaders

Processes

Total cost optimisation and end-to-end cost models for integrated processes

Tools

Portfolio management based on cost-benefit analysis and tracking

Competencies & Skills

Defined training roadmap for growing operational excellence

Methodologies

Defined cost-out methods for cross-sector benchmarking

Gaining competitive advantage in downturns and beyond

From our survey of 180 global senior leaders across 10 sectors, we’ve found a way to cut costs that improves, rather than limits, your ability to innovate, grow and compete. It’s an entirely new approach to thinking about cost.

We believe a long-term focus on cost, embedded in the mindset of your people, can create opportunities to find innovative, differentiated approaches to cost optimisation, ultimately driving competitive advantage. Our report provides three practical ways all leaders can seize the opportunity, with examples of best practice and a focus on specific actions for each sector.

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INDUSTRY RANKINGS

Every industry has an opportunity to optimise costs and create competitive advantage.

We’ve ranked 10 industries according to their overall cost optimisation performance. The automotive sector is at the top but there are still opportunities to progress, while the government and public sector has the most significant opportunity to improve.

The leaders

Automotive

1st

Automotive

Life sciences

2nd

Life sciences

Industrial engineering

3rd

Industrial engineering

Energy & utilities

4th

Energy AND utilities

Consumer

5th

Consumer

The laggards

IT/Telecommunications

6th

IT AND Telecommunications

Defence & aerospace

7th

Defence AND aerospace

Financial services

8th

Financial services

Transport

9th

Transport

Government & public sector

10th

Government and public sector

How we can help

We’ll support you through a diagnostic process that looks at all six dimensions of cost-out maturity, assessing where you are and where you need to be to outperform the competition.

We help our clients identify and realise cost savings by:

  • setting a clear and comprehensive cost-out vision in line with your short-term objectives and long-term ambitions

  • utilising a Design-to-Cost approach alongside the entire product life cycle (software, product development, serial production, after-sales) as well as for production investments

  • creating a product development roadmap to prioritise spending on projects and technology capabilities

  • defining a platform strategy to reduce cost baselines and supply chain risk for products or customer offerings

  • conducting a comprehensive process of teardown, reinvention and optimisation to understand key cost drivers and deliver better functionality and outcomes at lower cost

  • building a dedicated cost-out function to calculate product costs and facilitate cost-out initiatives, and to influence and gain buy-in from across the organisation.

Our approach finds opportunities, efficiencies and areas of optimisation to drive greater competitiveness through a tailored performance improvement programme.

WATCH
Perfect Cost Grid®
Using proven templates and databases and drawing on thousands of data items, our Perfect Cost Grid® approach enables your organisation to calculate product costs and achieve 100 per cent cost transparency.

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Contact us

Shanton Wilcox

PA global manufacturing expert

Chris Sheryn

PA operational excellence expert

Søren Knudsen

PA transformation expert
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