Cost and Efficiency

The list of challenges facing corporate leaders is lengthy, from globalization and the European debt crisis to new technologies and industry disruption. These challenges require businesses to streamline operations so they can move ahead with greater efficiency and effectiveness. But instead of focusing on short-term solutions, it’s time to move toward true cost excellence.

Cost excellence goes beyond simple cost-cutting measures and supply chain efficiency. It enables increased transparency and accountability, higher employee morale, and faster decision-making. Most importantly, it lays the foundation for ongoing improvement, making companies more agile and less vulnerable to unfavorable or unexpected economic changes.

There are several hallmarks of cost excellence:

  • Reducing costs at the source
  • Setting bold targets early
  • Selecting the right tools
  • Ensuring full transparency
  • Communicating early, openly, and consistently
  • Recognizing interdependencies
  • Ensuring executive commitment and accountability
  • Aligning behaviors, goals, and incentives

Putting these principles to work is not always easy. But companies that make a commitment to cost excellence will emerge leaner, more nimble, and more competitive. Here’s how.

Build Consensus and Commitment on Goals and Scope

Select the Right Methodologies

Determine How Efficient and Effective the Organization Is, and Set Targets for Change

Develop a Plan to Hit Your Target

Drive Implementation of the Changes

Make the Changes Sustainable

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