In the current economic climate, cost
management is back on the agenda for many companies. Whilst simply slashing
headcount is sometimes the only solution, it is usually traumatic and can
result in tangible, longer term problems (e.g., through loss of skills).
However, more rigorous and analytical approaches exist that allow an
organisation to manage costs down without wholesale headcount reduction. Since
the typical need to drive down costs is urgent, focus is typically on short to
medium term solutions which are within the control of an organisation, focusing
on lean production. Examples of such techniques are: - Customer segmentation &
portfolio optimisation - Product line pruning
- Aggressive sourcing
- Outsourcing
- Re-engineering
- Back Office & Operations consolidation
These techniques use a battery of tools to analyse the drivers of cost within an organisation and then progress to execute the necessary steps to reduce the overall expense base and increase profitability. Typical results are reduction of expenses by 15-20% (but savings may be substantially higher in particular categories).
Sixhills has a broad range of experience applicable in cost management and can help you to reduce your cost base.