Enterprise Cost Reduction
An integrated approach
Companies are permanently assessing the cost structure and looking for cost reduction opportunities. Challenging targets are often 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 multidisciplinary way, a cost reduction exercise to decrease the purchase spend for packaging material 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 that 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 it as a core capability and entrench it into everyday management attitudes. Therefore, Deloitte has developed an ECR methodology to help companies control their cost reduction programmes.
ECR incorporates a scalable and sustainable approach to creating value through transformational cost reduction opportunities. It is a strategic imperative with a value-oriented mindset and a bias for execution, that requires both vision and operational discipline.
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