"Your booster for savings along the value chain".
Cost reduction is both a sprint and a marathon. Many initiatives start with high ambitions and underestimate the obstacles to implementation, so that successes are limited to a short period at best. Effective cost reduction programs are guided by at least three criteria that will continue to drive the performance and development of most value chains over the long term:
- Process excellence: the key driver of the cost base.
- Flexibility: those operating in volatile markets must be able to respond to sales fluctuations or new, aggressive competitors at any time.
- Resilience: cost reduction programs must specifically factor in disruptions such as interrupted supply chains.
Combination of cost reduction levers for the industry.
ROI-EFESO offers you the right approach to meet these challenges. Together, we identify savings potentials in your organization and ensure that they are effectively exploited. In doing so, we focus on the operationalization of cost reduction measures along the entire value chain of the manufacturing industry. Within
... four weeks, we work with you to develop a roadmap for avoiding Waste and increasing efficiency in operations.
... four to eight months, we jointly activate savings potential through lean processes and structural improvements.
ROI-EFESO works with you to develop the customized cost reduction program for your organization - both for short-term needs and for continuous, long-term savings.
We always focus on a quick identification of cost drivers and jointly derive the appropriate measures to reduce or avoid costs. In addition, we implement all action steps using a set of agile methods, which allows particularly fast implementation in practice. You can always check these successes on the basis of a degree of hardness system.
In doing so, you benefit from the methodology of our cost reduction approach, which was specially developed for industry. This combines four phases and makes the effectiveness of the measures visible:
PHASE 1: CHALLENGE - Quick Assessment (top-down)
In the first phase of a cost reduction project, the team focuses primarily on the following tasks:
- Breakeven calculation as "north star" for minimum required cost savings for loss-making business model
- Recording of cost drivers on the basis of P&L and internal cost accounting, including
- Cost structure analysis: Identification & weighting of cost blocks
- Assignment of cost drivers to sub-processes and identification (if necessary creation of value driver trees)
- Trend analysis: presentation of cost structures and blocks over the last 3 to 5 years
- Sensitivity analysis to capture the impact of cost reduction levers on the income statement
- Benchmarking: Presentation of meaningful key figures and their comparison with peer groups ("best possible" cost savings), e.g.
- Manpower Index, OTIF
- Absenteeism, level of employment, sick leave
- Inventory turnover
- Gap analysis: comparison of planned data with actual data, e.g.
- Number of FTE, contribution margins
- Attendance times, default times
PHASE 2: DEEP DIVE - Functional & Structural Assessment (bottom-up)
In the second phase, we focus on the cost drivers in the key functional areas of the organization. Based on our expertise in the manufacturing industry, we can achieve particularly rapid savings in individual areas.
PHASE 3: INNOVATE - Continuous Deviation Management
Do the measures identified so far match the savings targets set at the beginning? We check this in the third phase. The derivation and evaluation of the approach also focuses on the following results:
- Definition of fast-acting measures (quick wins) and responsibilities
- Comparison and prioritization of measures from the top-down and bottom-up approaches
- Evaluation of the measures with regard to impact on financial statements, relevant key financial figures, implementation period and implementation effort (incl. costs & investments)
- Creation of a prioritized measures roadmap
PHASE 4: REALIZE - Implementation Management & Controlling
In the fourth and final phase, the cost-cutting measures come into play. Here, the focus is particularly on the ...
- ... fast, pragmatic and short-cycle implementation of measures in agile sprints with degree-of-hardness systematics
- Monitoring the success of implementation and its effectiveness (P&L effectiveness)
- Continuous identification of further measures to compensate for omitted measures and to achieve the specified savings target
- Align your cost reduction approach with your business strategy.
- Set realistic goals.
- Involve your employees in the design and implementation of the approach.
- Ensure Management Attention - by breaking down cost reduction goals to the functional level and linking them to personal goals of managers.
- Build effective cross-functional program management with external and internal resources.
- Avoid parallel and uncoordinated cost reduction initiatives (silos).
- Regularly review results by accurately tracking key measures and "bridging" them into the P&L.
- Use cost management as a steering tool for the transformation into an efficiency culture.
The 4 main processes offer numerous starting points for savings. Please feel free to contact us for more information on the individual areas.