Cost Reduction Consulting
Businesses launch targeted cost-cutting initiatives and full cost reduction programs for a multitude of reasons. Frequent triggers include one or more of the following: macroeconomic downturns, cost increases, price decreases, volume decreases, entry of lower-cost competitors, mergers, acquisitions, divestitures, turnarounds, and restructurings. Cost reduction programs are fraught with risks. To increase the speed and effectiveness of your cost reduction program, leverage our specialized expertise and flexible operating models for aerospace and defense (A&D), automotive, healthcare, natural resource, retail, and TMT companies.
Our Principles
Overcommunicate internally and externally
Act decisively and move rapidly — success/failure is determined in 6 to 12 months
Prioritize, prioritize, prioritize
Anticipate and mitigate risks
Incentivize risk-taking and reward performance
Our Process
Identify and quantify costs
Identify critical strategic, operational, and financial inter-dependencies
Assess full potential and returns on investments, and prioritize initiatives
Implement our change management process
Getting Started
How long does it take to get started with a cost reduction program? While every situation is unique, Strategic Value Partners (SVP) typically identifies and quantifies costs; identifies critical inter-dependencies; assesses full potential and returns on investments, and prioritizes initiatives in 4 to 8 weeks.
What are the top 3 mistakes companies make in cost reduction programs? While every situation is unique, the top 3 mistakes generally include the following: 1) Failing to identify inter-dependencies; 2) Incorrectly prioritizing initiatives and focusing on too many initiatives and/or the wrong initiatives; and 3) Failing to establish a program office structure and governance that promote standardized processes and tools as well as rapid decision-making.
How long do cost reduction programs last? While every situation is unique, cost reduction programs generally last 12 to 24 months. Just as importantly, we’ve found that achieving success in the initial 6 to 12 months dramatically increases the odds of achieving cost reduction goals. The reverse is also true — i.e., programs that struggle in the initial 6 to 12 months rarely succeed.
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Where we operate
Our extraordinary clients are headquartered or operate in cities such as Atlanta, Austin, Baltimore, Beijing, Boston, Charlotte, Chicago, Columbus, Dallas, Denver, Detroit, Dubai, Fort Worth, Hong Kong, Houston, London, Los Angeles, Mexico City, Miami, Minneapolis-St. Paul, New York, Omaha, Paris, Philadelphia, Phoenix, Pittsburgh, Portland, Riyadh, San Antonio, San Francisco, San Jose, São Paulo, Seattle, Seoul, Shanghai, Stamford, Toronto, and Tokyo. Our work frequently takes us to remote locations as well.