(edited)
Get Active in Our Amazing Community of Over 451,000 Peers!
What is a good generic checklist/strategy/framework to use when cutting costs in a case to think about all the different ways to do so?
Overview of answers
-
Upvotes
-
Date ascending
-
Date descending
Hi,
As usual, no predefined framework that can be used everywehere. Common sens will for sure help more :)
If looking for cost reduction, you need to understand :
- what are the main cost of the company : so you need to understand the activity and think about the cost structure it involves. Depending on the business you could identify this with the value chain and / or the type of cost identification (labor, raw material, etc.)
- Focus your effort on the biggest cost categories : this will create more impact in absolute value. eg. 20% saving on 100M€ is better than 20% savings on 1M€ :)
- tackle each category one by one : starting with the biggest cost buckets
Hope this helps
Best
Benjamin
Hi,
I would recommend the following:
Structuring:
- What is the cost composition and what are 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
The key concepts that you have to learn:
- Internal / external benchmarking
- Idle time
- Core processes (usually are optimized) and the supporting processes (usually are cut)
- Math structures (Frequency of operations * time per operation)
- Other useful structures (e.g. people - process - technology)
Feel free to reach me for further help with these cases.
Best
Related Products
McKinsey Solve Game Simulation Package by Francesco
- Play for Real the Ecosystem Game (Coral Reef & Mountain Ridge)
- Play for Real the Redrock Game (All 4 Phases Included)
- Receive for FREE the Imbellus Solve Combo and McKinsey Imbellus Game Secrets Guide
Break Into Consulting - Strategy Consulting Firm's All-In-One by Alexandre
- Created by 2 BCG consultants
- Covers most strategy consulting firms
- Get you to the backstage of the strategy world
Break Into Consulting - Industry Overviews by Alexandre
- Created by 2 BCG consultants
- 15+ industries covered
- Practical tips to master any industry
Break Into Consulting - Frameworks I wish I knew by Alexandre
- Created by 2 BCG consultants
- Covers most interview cases
- Practical tips to crack the case
BCG Online Case Combo: Software Simulation by Francesco
- Practice with 6 Chatbot Tests (Casey Style), including 4 Software Simulations
- Test Yourself with 4 Live One-Way Video Interviews (with AI Generated Tips)
- Receive for Free the BCG Online Case Secrets Guide
BCG Online Case Secrets by Francesco
- Master the 5 Types of Questions Asked by the Chatbot
- Discover the Exact Steps to Prepare for the 1-Minute Video Assessment
- Prepare in Advance by Solving 2 Complete Chatbot Cases
Imbellus Solve Combo: Guide + Videos by Francesco
- Watch how to Crack the Ecosystem Game in 23 Minutes
- Find Out how to Master each of the 4 Phases of the Redrock
- Receive for FREE the McKinsey Imbellus Game Secrets Guide
Imbellus Test at McKinsey – Guide by Luca
- Detailed and full game analysis
- Hands-on example to solve the game and support you
- Practical tips to crack the game
McKinsey Imbellus Solve Game Secrets by Francesco
- Learn the Exact Steps to Crack the 6 Games of the Imbellus
- Discover the Proven Way to Master the 5 Skills Tested in the Game
- Create your Ecosystem Chain Automatically with the Automated Excel Included
The Secret McKinsey PEI Cheat Sheet by Robert
- Learn how to correctly prepare and structure your McKinsey PEI
- Impress your McKinsey interviewer with a perfect PEI
- Save tons of time in your PEI prep
BCG Potential Test #2 by Gaurav
- BCG Potential Test with 23 questions about "World Electrification Case"
- Created by ex-MBB interviewer Gaurav
- Format and style for a real test experience
BCG Potential Test #1 by Francesco
- BCG Potential Test with 23 questions about "CoverCell Case"
- Created by ex-BCG consultant Francesco
- Format and style for a real test experience
Prep Guide for McKinsey PST by PrepLounge
- McKinsey PST preparation guide incl. 13 pages of useful tips
- Created by ex-McKinsey consultants
- Detailed information on test structure, question types & core skills
McKinsey PST #3 by Riccardo
- PST with 26 questions about "Delicious Juice Case"
- Created by ex-MBB consultant Riccardo
- Industries: Beverage, tourism, pharma
McKinsey PST #2 by Gaurav
- PST with 26 questions about "WeKlin Case"
- Created by ex-McKinsey consultants
- Industries: Retail, energy, franchise
McKinsey PST #1 by PrepLounge
- PST with 26 questions about "FloraFashion Case"
- Created by ex-McKinsey consultants
- Industries: Retail, energy, franchise
Related Articles
Related Cases
Related Case Interview Basics article(s)
McKinsey Growth Pyramid
Structured framework for sustainable corporate development, including market penetration, product development, market development and diversification.
McKinsey Imbellus Game
Find out what the McKinsey Imbellus Game is all about. Get specific insights on how to ace your case interview at McKinsey.
BCG Online Case
Get to know the BCG Online Case and learn how to approach this specific Boston Consulting Group Test when you want to start your careere in Consulting.
Bain Sova Test
The Bain Sova Test is an aptitude test for applicants to Bain & Company. The test consists of 4 areas and is used at Bain for job interviews in consulting.
Influence Model
The Influence Model by McKinsey emerged in the early 2000s and is the result of practical experience of the consultants at McKinsey & Company.