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.
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.
Company-wide cost-out vision that integrates target setting and reward
Cross-functional cost-out team and fully empowered programme leaders
Total cost optimisation and end-to-end cost models for integrated processes
Portfolio management based on cost-benefit analysis and tracking
Defined training roadmap for growing operational excellence
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.
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.
1st
Automotive
2nd
Life sciences
3rd
Industrial engineering
4th
Energy AND utilities
5th
Consumer
6th
IT AND Telecommunications
7th
Defence AND aerospace
8th
Financial services
9th
Transport
10th
Government and public sector
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.
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