Cost-out: opportunity + innovation = competitiveness
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.
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.
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.