Enterprise cost reduction

An integrated approach

Companies are permanently assessing the cost structure and looking for cost reduction opportunities. Often, challenging targets are set for company’s departments, locations or business units. Such a fragmented approach often results in sub-optimal and temporary cost savings.

If not approached in a multi-disciplinary way, a cost reduction exercise for packaging material that is based on decreasing the purchase spend, might result in a higher number of quality problems or additional handling costs. Overlooking the consequences of certain actions is regularly the cause for reversing the initiative.

Deloitte is convinced cost-cutting can be embedded in the corporate structure and culture so that it does not cause a major disruption every time another programme is introduced – but companies need to think of cost-cutting as a core capability and entrench it into everyday management attitudes. Therefore, Deloitte has developed an Enterprise Cost Reduction methodology to help companies control their cost reduction programmes.

Enterprise cost reduction incorporates a scalable and sustainable approach to creating value through transformational cost reduction opportunities. It is a strategic imperative that requires both vision and operational discipline, with a value-oriented mindset and a bias for execution.