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 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 yield 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 is uniquely positioned to advise clients, bringing its category and transformation expertise to help clients achieve their specific organizational, supply management and process efficiency objectives.
Traditional approaches to cost reduction are predominantly reactive and focused on “top slicing” across the organization. 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
Our sustainable cost reduction approach puts in place five key levers that combine value chain insight and Zero-Based Budgeting across direct, indirect, people and property. GEP's strategic cost management system 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 unnecessary cost with the right lever (value chain-defined cost reduction levers)
- Enable control and intervention (category ownership and value delivery)
GEP's Approach to Strategic Cost Management
GEP delivers strategic cost reduction by combining two key methodologies:
Drive Profitable Growth With Zero-Based Budgeting
While basic cost-cutting programs are important, they are often limited in their reach and impact on the enterprise.
Unlike traditional budgeting processes, Zero-Based Budgeting (ZBB) is a high-impact cost management approach in which funds are allocated based on program efficiency and necessity rather than budget history and spending trends. This helps identify and direct resources toward value-adding activities, while channeling funds away from activities that perform poorly.
GEP can help you unlock true value with ZBB to drive higher business growth and profitability.