Cost Structure Optimization
Not only finding where to save, but rethinking how the organization uses its resources and creating more value from what exists.
The right cost structure lets an organization improve profitability and free resources for where value is created.
Over time, changes in activity volumes, workforce, suppliers, procurement and work processes can create a cost structure that no longer fits the organization’s needs. The challenge is not only to identify where to save, but to understand what drives costs, which of them are truly needed to create value, and how to build a cost structure that produces significant improvement or new value.
How we work
- 01
End to end
Examine the cost structure and what drives it as a whole
- 02
Cost versus value
Focus resources on activities that create value
- 03
Practical alternatives
Build moves that cut costs or increase value while keeping the required capabilities
Where is the improvement potential?
We examine the cost structure as a whole to understand what drives costs, where gaps exist and which expenses can be reduced or managed differently without harming the organization’s capabilities, including through:
Cost structure analysis
Mapping costs and understanding the main components that affect them, to identify cost centers and savings opportunities.
Workforce costs
Examining workforce size, work allocation, workloads and how resources are assigned relative to the needs of the operation.
Procurement and supplier optimization
Examining contracts, commercial terms, purchase volumes and supplier structure to identify savings opportunities.
Reducing operating and running expenses
Examining running expenses and identifying activities or resources that can be reduced, consolidated, reused or managed in a more focused way.
Cost versus value
Examining activities and expenses against the value they create, to focus resources where they contribute significantly to operations and business goals, and to create additional value from existing resources.
Building practical savings moves
Shaping and prioritizing moves by savings potential, business impact and feasibility, while keeping the required capabilities and service level.
The value to the organization
A cost structure improvement process can help the organization:
Reduce costs and improve the expense structure
Identify the main cost drivers and sources of savings
Focus people and resources on activities that create value
Improve procurement and supplier agreements
Keep the required service level and capabilities while cutting costs
Build a cost structure that supports profitability and growth over time
Create new value from the existing cost structure
Use resources that are currently unused or only partly used
Make the cost structure an engine of growth
Improving the cost structure starts with the ability to look differently at how the organization uses its resources: not only where to cut, but where to act differently and create more value from what exists.
We combine business thinking, analytical capabilities and operational understanding with systematic, innovative thinking, to identify opportunities for change, examine alternatives and build moves that cut costs while keeping the required capabilities and supporting the organization’s business goals.
Want to explore the improvement potential in your cost structure?
Talk to us and we will look together at where the main opportunities lie to cut costs, focus resources and improve profitability.
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