Creating substantial and sustainable cost improvements that do not put strategic change and growth at risk is a challenge for most organisations.
Strategic cost improvements are achieved when a competitive cost position is reached. To achieve sustainable cost improvements requires a focus of two to three fiscal years to ensure that costs do not creep back. Strategic cost transformation engagements are typically longer term engagements that can vary from three to twelve months in duration.
Strategic cost improvements come from transformation in operations, support functions and sourcing of goods and services.
Our approach is to focus on improving labour related costs through operating model transformation and improving costs related to goods and services through strategic sourcing transformation.
Operating Model Transformation
- Business processes and systems – improving the efficiency and effectiveness of operational and support processes.
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- Organisation design – optimising organisation structure in terms of the spans and layers that are appropriate to the industry and the competitive landscape.
- Skills and capabilities – developing the right mix of skills and capabilities to efficiently and effectively operate and manage the business.
- Configuration of assets – optimising the location, footprint and number of physical assets and modes of transport between sites.
Strategic Sourcing Transformation
- Sourcing strategy – developing the best sourcing approach based on the strategic importance of the goods and services and the complexity of the supply market.
- Procurement cost improvement – understanding supplier economics, product usage and specifications to reduce the cost of goods and services.
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