Case Study
Cost Reduction at a Subsidiary of a Privately Owned FMCG Company
Sep 25, 2022 06:23 AM
Introduction
We have led a Cost Reduction Program for a leading FMCG company looking to boost profitability of one of its business arms. With over EUR6 billion in global revenues, the business was looking to improve profitability of its operations and make constructive changes to their spend patterns. The focus of the project was on the regional offices and supply network in Europe. The client committed to reduce the costs, in order to reinvest in growth and strengthen the bottom-line, with 50% of savings expected to come from external spend.
Problem statement
We were brought in to augment a consulting team with cost reduction expertise required to facilitate cost reduction challenges at the intersection of the regional Procurement and Finance functions. The target was set by the Global Finance team and our task was to find ways of reducing demand for 3rd party indirect spend. With prior experience in delivering cost reduction programs, we have led coaching and SME-knowledge transfer activities across EU markets and 10 manufacturing plants spread across Europe. The challenges of the program were that the client had set its targets high, the business did not have any prior experience in cost reduction, short timelines for a targeted cost reduction program, conflicting priorities at times and varying degree of business readiness in a multi-sited environment.
Approch
Our role was to ensure cost reduction rigour and knowledge transfer in a consistent way across markets, drive scoping of cost reduction opportunities, share best practice across teams and maintain pace in a fast and deadline driven environment of a multi-sited organisation. The main work revolved around workshops, All-hands calls, ideas generation, data analysis, comms, progress updates for regional and global stakeholders and maintaining the overall rhythm in conjunction with other workstreams which were running in parallel.
Results
We delivered sign-offs and budget cuts of a multi-million USD saving pot, coached teams to be ready for delivery of initiatives and ensured the shared knowledge could be used for continuous improvement initiatives in the future. As a result of the Program, the client has boosted its profitability agenda and, with our help, led the efforts to achieve multi-million USD savings across European operations.
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