Cost Reduction and Cost Management

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outsourcing procurement

There are many ways organisations can reduce costs. BvW Global’s focus is on the reduction of redundant costs to increase profit margins.

Costs must be understood, measured and actioned in a logical approach. Failing to do so may add value to a single department only and not address cause and effect impacts.

Cost can be measured and decreased with various tools such as Procurement and Supply Management, Tier 3 Strategic Sourcing, Price and Cost Analysis, Supply Chain Management, Inventory Optimisation and Target Costing. These tools, when used in a harmonious manner contribute to an organisational cost elimination.

“Managing cost begins by creating visibility of these costs and their relationship impact to revenue and profit margins.”

Cost drivers must be understood and linked back to all Company cost reduction initiatives in order to avoid ‘passing-on’ cost from one department to the next, hiding the true picture, and failing to dramatically change organisations way-of-work.

Insight.

We have helped clients reduce or eliminate their costs across a wide range of industries. Sample projects include:

  • Developed the Procurement Contracts Infrastructure for a $10 billion pharmaceutical care company.
  • Managed a Procurement Card Pilot Programme for a $6.3 billion physician services company with savings of $1.8 million (Pilot Programme) and $35 million (Roll Out).
  • Creation of a Strategic Sourcing Model for a $7 billion Fortune 500 paper / distribution company and $80 million savings.
  • Supply Chain Model for a $5 billion automotive company with $2.8 billion in purchasing volume. Identification of $112 million savings including 23% non-managed price variance from its supplier base.

Please contact us to discuss performing an Cost Savings Scan for your organisation.

 

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