Did you know that 70% of companies have no strategy for cost management or ongoing programme?
How do you manage? A or B?
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A) Cost reduction
- Short term one-off projects
- Focused on an isolated business cost or a single line in the ledger at a time
- Blunt instrument applied mechanically
- Undue weight given to headline price
- Adversarial approach to suppliers
- Well-intentioned but subject to “the knowledge gap”
- Exercises don’t work! 95% of costs flood back in costing the UK £90bn since 2008 (KPMG)
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B) Strategic cost management
- Long term and sustainable
- Holistic and dynamic process
- The “Total cost of ownership” informs decision-making
- Focus on value for money and impact on goals
- Suppliers seen as allies although independent
- Consultative or advisory – specialist tools, people, knowledge, experience are essential
- Want more…Strategic cost management for the 21st century
Advance to profit improvement
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Clik here to view.Start your journey through strategic cost management today with a free business healthcheck.
Call Ron Yellon on 01234 865869.
Ron.yellon@auditel.co.uk | www.auditel.co.uk/ronyellon | @Ronconomics
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