Cost Re-engineering
The level of expenses has a significant impact on the bottom line and can be a critical factor in the survival of a business. The cost re-engineering process uses innovative techniques to dramatically reduce costs and maximize the value of expenditures. A well managed expense level will increase cash (reducing interest costs), offset revenue declines, fund growth initiatives and improve shareholder returns.
Purpose
To identify and implement cost savings and cost redeployment opportunities throughout the organization. To engage and motivate staff and equip them with the tools to implement and drive the initiatives.
Process
- Mobilize your team and engage them in the project.
- Perform an in-depth analysis of expense areas, review trends and compare to benchmarks.
- Applying various techniques such as expenditure value assessment, Lean Six Sigma, and best practice comparison, evaluate individual expense items and identify cost savings opportunities.
- For each opportunity, quantify the time and effort that would be required in order to realize the projected savings.
- Present to management for review and discussion.
- For the opportunities selected, formulate action items and design a process for implementation.
- Guide execution and track results.
Results
An effective and achievable cost savings program that realizes dramatic improvements in costs and cost management practices, increases the bottom line, provides funding for re-investment and ensures the company remains competitive.
Case study # 1 describes a cost re-engineering project that identified 160 cost reduction opportunities and generated $12M in savings annually for our client. For details please click on Case Studies.