Strategic Approach to cost efficiency

The competitive and ever-changing world we live in requires agile organizations to survive and thrive. Many businesses need to realize sustainable cost efficiencies. The necessity to achieve these efficiency gains in the organizations’ operating models arise from increasing competitive pressures, organizational structures that do not support growth or change, and legal or fiscal requirements. This article presents an approach in the form of a framework of process improvement ideas that will address these issues and lay the foundations for sustainable growth.

Ground Rules
The success of efficiency initiatives depends in most cases on a few critical considerations, such as:

• Actions must be consistent with the current strategic focus of the organization, even if the current option may not deliver maximum savings;
• A consistent top-down approach that focuses on the most pressing issues;
• Potential restrictions and opportunities;
• Commitment to the initiatives by the organization as a whole;
• Clear and consistent communication.Ideas for Improvement

Ideas for Improvement
The goal of this approach is to realize the highest possible benefits by quickly identifying sustainable and implementable measures which reflect in a new lean operating model. Based on a structured framework of typical improvement levers and best practices, businesses can select, tailor, and implement the right measures from the following ideas.

Application Justification
Application justification is the practice of strategically identifying business applications across an organization to determine which applications to keep, replace, retire or consolidate.

Software lifecycle Management
Software lifecycle management covers the entire lifecycle from the conception of the idea through to the development, testing, deployment, support, and ultimately the retirement of systems.

Reward Optimization
Total reward optimization enables organizations to obtain optimal returns by allocating monies in ways that appropriately recognize employees’ varying levels of contribution and performance.

Travel expense reduction
Reducing direct and indirect travel expenditure is one of the biggest challenges in travel management. Choices are sometimes limited, while the pressure to remain within the set limits can be high for travel management, as standards for saving costs are passed onto the person responsible for travel, while at the same time travelers expect adequate hotels for their business trips.

Supply Chain Optimization
Supply chain optimization techniques, when leveraged appropriately, help companies to attain their strategic business objectives, drive substantial reductions in operating costs, and make informed business decisions.

Lean Procurement
A lean procurement strategy is a common-sense approach using simple technology. The principles focus on elevating efficiency and reducing costs by eliminating wasted steps, improving safety, standardizing the processes, and reducing inventory.

Effective Tax Rate Management
Businesses can manage and seek to lower the effective tax rate using tax planning, tax breaks, tax incentives, tax opportunities, and facilities.

Warehouse Optimization
Warehouse optimization is vital to the efficient operation of warehouses of all sizes. Done in a disciplined way, warehouse optimization includes automation and a determination of how to save time, space, and resources while reducing errors and improving flexibility, communication, management, and customer satisfaction.

Lean Approach
The lean approach is a way for businesses to think about process improvements that systematically find faster ways to bring more value to clients. It does this by providing a systematic, scientific approach to practicing continuous improvement. 

Demand Management
Management of demand is an increasing vital issue in improving the efficiency of supply chain operations. It balances customer necessities with the capabilities of the supply chain. Demand manage-ment involves the coordination of many activities, including demand forecasting, reducing variability, increasing flexibility and synchronizing supply, demand, production, procurement, and distribution.

Improved Inventory Management
The principal objective of inventory management is to determine and maintain an optimal level of inventory, which helps free some investment capital and reduces inventory holding and handling costs. Businesses should minimize the risk of overstocking inventory and the risk of running out of inventory stock.

“Trade promotion management is a challenge many companies face” 

Promotion Management
Trade promotion management is a challenge many companies face. Consumer goods companies spend substantial amounts of time and money on promotions with retailers designed to boost revenue or increase/protect market share. Imagine if you could perceive the effectiveness of your trade spend to enable decisions as you go, track which promotions are working to boost ROI, increase market share, and counter competitor activity. Picture if you could spot inefficiencies and forecast accurately. In a connected world with consumers having more choices, knowing which promotions are the winners, is quite beneficial.

CRM software evaluation and selection
enable decision-making capabilities, improve business intelligence and internal and external collaboration, and provide abilities to define workflows; data flows, the creation of approval triggers,
and support. Key Results By applying the ideas of the framework presented in this article, businesses can typically achieve the following benefits: an agile and robust organization with lean process flows, considerably reduced cost, streamlined external spend and investments, and the ability to manage future costs effectively.

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