No short cuts for obtaining genuine cost reductions

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Can You Do a Quickie?

Blog by Neil Grime – view his profile>

During initial meetings or even while networking I am often asked can you carry out a quick review?

There have even been some occasions when I have been presented with a sample invoice for a product or a service and been asked to advise if the company in question is paying too much or if savings can be made.

The response I often use in this situation is to be honest quite blunt and rhetorical. I usually ask the person if they would be happy to receive a recommendation or advice that does not provide any commercial or structural detail, that does not take in to account the product or service specifications, that it would likely result in the company not realising any savings and that they would probably have to look for another supplier in a few months.

It may not come as a surprise that they are not too keen on this option and potential outcomes.

A review of any area of expenditure, irrespective of its value must be extremely thorough and on a strict like for like basis. The requirements of every client or company or different and a review must take this in to account.

Irrespective of how many categories are being reviewed the process does take time. The success of any assignment is dependent on the data it is based on. If you put poor data in to the process do not be surprised if poor results come out at the other end.

Once this is made clear potential clients start to think that the process is going to be extremely invasive and take up a lot of their time. Nothing could be farther from the truth.

Apart from the initial data collection, which is sometimes completed in a few days the main review process takes place in our office and away from the client, leaving them to get on with their core tasks and responsibilities. Yes, the decision maker does have to be involved but this is mainly to take part in project review meetings at their office and the implementation process of any savings that are identified. Specific commodity queries are usually resolved from engagement with key users or stakeholders within the business and via the supply chain.

A tactical cost reduction assignment is not a KPMG data audit. It will not involve an army of consultants descending on a company’s staff and taking up unreasonable amounts of their time.

While the main aim of any cost review is to identify genuine and robust savings on a like for like basis it also looks to provide the additional assurance that the business will not be disrupted or distracted from its day to day tasks and responsibilities.

If you would like to know how we can help you to deliver significant reductions to your cost base please visit Cost Reduction Services

You can contact us or email neil.grime@ngba.co.uk