10Minutes on sustainable cost reduction

Download 10Minutes on sustainable cost reduction

Companies are justifiably anxious to reduce costs. But the problem with many cost-cutting measures is that they are put into practice without considering their sustainability. Often, cost savings achieved in the short term eventually leak away. The failed cost reduction initiatives wind up damaging corporate infrastructure and culture, leaving companies struggling well after the recession ends.

Faced with a protracted period of sluggish demand and tight credit, companies are now asking, “What has to fundamentally change so our cost reduction efforts work today as well as in the future?”

Highlights

• Traditional methods of cost reduction often fail over time.
• A strong foundation for cost reduction activities must be established before introducing game-changing transformational initiatives.
• There is no accountability, accuracy, or way to evaluate cost reduction efforts without clarity of operating cost drivers and linkages to financial plans.
• There are a number of steps companies can take immediately to move to sustainable cost reduction.
• If the spend culture isn’t addressed, cost reductions won’t be sustainable.