The 1990’s were epitomized by corporations embarking on re-engineering efforts focused on removing the 30% of ‘excess cost’. They primarily achieved this through headcount reduction. As the economic landscape changes, gaining the next 30% reduction has moved back to the top of the corporate agenda. But this time it is meeting heavy resistance – too much has already been cut. In this briefing we consider the question “Fundamental Cost Reduction – Impossible or Imperative?”. We evaluate opinion, conclude that firms have no option but to find new and innovative ways of driving cost reduction, and set out a series of proven approaches to achieve precisely this.

If fundamental cost reduction is a business imperative for your company, there are two over-riding principles which should guide your path forward. The first is that cost optimization should be a routine process within the firm, not a one-off event. And to achieve this costs must be understood if they are to be effectively removed. A Cost Review and Strategy is the foundation stone. Secondly, once the strategy is clear, focus all efforts, energies and resources on implementation. For it is there that the savings will be realized. But fully utilize Quick Wins in order to create confidence in the ability to implement.

To download the full document please click here (pdf format).

This article is part of Axon's Profit Management and Cost Reduction Process.  To view other articles in this process please visit the Profit Management and Cost Reduction page