In today’s highly volatile global business and economic environment, enterprises worldwide are facing increased challenges, both externally and internally, to sustain profitable growth.
Under these rapidly changing market conditions, the ability to reduce operating costs and allocate budgets correctly is paramount for organizations to survive and grow.
GEP's strategic cost management services enable leadership teams to reduce expenses in categories that provide little impact, and optimize spend in areas that drive sustainable growth. Our strategic cost management programs can help identify and eliminate up to 35 percent of SG&A (Selling, General and Administrative) expenses within a year, freeing up cash that can be invested to drive growth and enhance shareholder ROI.
GEP's Approach to Strategic Cost Management
GEP delivers strategic cost reduction by combining two key methodologies:
Traditional approaches to cost reduction are predominantly reactive and focused on “Top Slicing” across the organisation. While these initiatives deliver tactical, within quarter results, they are not sustainable for three key reasons:
1. Focus on “Big-Ticket Items” without understanding of cost, activity and output
2. Fragmented and inconsistent implementation
3. Lack of visibility into results to measure effectiveness
The Five Levers of Strategic Cost Management
Our sustainable cost reduction approach puts in place five key enablers across the organization that combine value chain insight and Zero-Based Budgeting across direct, indirect, people and property. GEP's strategic cost management levers can help you:
- Understand what your cost and drivers are (spend and demand)
- Know how activity relates to cost and output (good and bad cost)
- Embed accountability with visibility (aligned sponsors, targets and structure)
- Extract non-value add cost with the right lever (value chain defined cost reduction levers)
- Enable control and intervention (category ownership and value delivery)