Structure/Framework for Cost Cutting Cases

I'd look at it through top-down and bottom-up analyses:

• Top-down: Benchmark of costs against competitors and other comparable companies across general cost buckets (e.g. SG&A - Finance, IT, Marketing, legal, etc...) - that gives you an idea of the potential for cost reductions
• Bottom-up: Mapping of all activities that are performed by people in in each function and allocating time and ultimately costs. Then sort them by costs and look at the top 80% and pressure test each activity to understand if you really need this activity being performed.

Hello!

With such little context, I would deep dive by starting to add branches from each node.

For instance, here, i would separate in Fixed and Variable and see where the issue is (e.g., changes vs. other periods, changes in the % distribution, etc.)

Then you will have a thread and pull and pull to arrive to the solution

Hope it helps!

Cheers,

Clara

Hey there,

You are going in the right direction. You could take one of the following aproaches:

• Fixed & Variable cost route
• Total manufacturing cost (raw material, labour & overhead)
• Operating Model route (cost removal from customer channels, products, process, technology, FTEs, physical assets)

Depending on which option you choose, keep double clicking to come up with lets say top 3-5 factors you would analyse.

Feel free to send me a direct message if you wish discuss more and understand the cost/revenue tree diagram.

Hi,

Overall I would look at the following:

• Cost composition and the biggest costs
• Benchmarking of the biggest costs to find the improvement potential
• Process improvements to meet the benchmarks
• Costs and benefits of the proposed initiatives

Feel free to book a session with me. I had a dedicated session on cost-cutting / ops cases where we can go further into details

Best!

Hi, I have a specific framework to approach in an Ops consulting way a cost-cutting problem. Feel free to text me for a quick sharing

Best

ANtonello