Streamlining costs and expanding opportunities: A sustainable cost transformation approach in consumer products

In today's complex economic climate, consumer product companies face unique challenges like a volatile economy, changing trade policies, supply chain issues, and shifting consumer expectations. Understanding cost drivers and their impact on overall value is crucial for increasing margins and achieving sustainable growth.

Rethinking traditional approaches
Traditional accounting-based approaches aimed at minimizing costs are increasingly challenged by frequent supply chain disruptions. Organizations should reframe their approach, moving away from traditional and piecemeal cost management to create strategic efficiencies across the board. This approach allows them to redeploy resources—whether capital, equipment, or people—to accelerate prosperity. It’s a bold new era of cost management.

Sustainable cost transformation: A path to future-readiness
By ensuring that cost reductions are aligned with business goals, consumer product companies can reinvest savings into key initiatives such as digital transformation, product innovation, and market expansion. This reinvestment not only fosters growth but also creates a competitive edge. While quick wins might offer immediate relief, they often pave the way for deeper inefficiencies and costly reversals. A focus on root cause analysis is essential to prevent these inefficiencies and promote sustainable growth.

Case study: Strategic supply chain cost transformation for long-term stability and competitiveness
This case study demonstrates how this approach helped a $1B Canadian consumer product company transform its supply chain challenges into growth opportunities, reducing overall transportation costs by 25% and achieving higher efficiency and agility.

This article discusses a strategic and holistic approach to cost management, moving beyond superficial cuts. It provides specific tactics to eliminate procurement inefficiencies, optimize supply chain networks, standardize best practices, and leverage digital and automation solutions.

Deloitte’s Sustainable Cost Transformation strategies are meticulously designed to address both acute and long-term financial, strategic, and operational cost pressures. Our projects are closely aligned with clients' purposes and objectives, enabling organizations to concentrate on their most productive assets and realize enhanced capabilities. This comprehensive approach ensures that companies are not just cutting costs to survive but are strategically positioned for future growth and success.