Our Perspectives

Cost management is on every CEO’s agenda today. Organizations face a challenging environment—slow down of growth in developing economies, increasing costs of inputs and volatility in prices of inputs (commodities), new competitors from emerging markets with fundamentally different cost positions, and customers’ increasing value consciousness. All of these changes are exerting pressures on organizations’ margins.

Cost management programs need to move beyond the traditional approach of undertaking functional initiatives for reducing cost to making strategic and fundamental changes to the organization’s business model to achieve and sustain a cost advantage over competitors.

A comprehensive approach can help organizations answer questions such as:

• How can we simplify our business model to achieve a better cost position and still deliver the same or better customer experience?
• How can we re-configure our delivery model—supply-manufacturing-distribution network—to achieve a fundamentally different cost position?
• How can we extract more out of our investments in assets—both current and fixed—to generate better asset productivity?
• How can we enhance efficiencies and effectiveness of sales, general, and administrative (SG&A) expenses?