Successful cost reduction strategies you've used recently?

What are some effective cost-saving strategies you've successfully implemented in your company?

I’m curious to hear about real-world strategies that have helped companies achieve significant cost savings. In my experience, a lot of cost reduction efforts revolve around switching from one supplier to a more cost-effective alternative. While this approach has proven valuable, I’d love to open a broader discussion on other successful methods.

Have you implemented innovative procurement strategies, optimized logistics, renegotiated contracts, streamlined processes, or leveraged technology to drive savings? What challenges did you face, and how did you overcome them?

Looking forward to hearing insights from professionals in this space!


AIMDRIVE-AI Solution:


Adopting a fact-based approach for assessing supplier price increase requests has yielded many cost avoidances/reductions. I would engage in the following analysis every time I deal with a supplier price increase request to identify whether the price increase is justified: 

1.  Price Analysis: Look at benchmarks related to the trend in price changes over time. This is sometimes sufficient to identify whether the price increase request is justified.

2.  Cost Analysis: This is especially relevant and a must-do after Price analysis is performed, for purchases that are non-industry standard (purchases for which there is no industry benchmarks available because few companies buy these specifications). Cost analysis typically starts by developing a view of the average cost structure of products (or services) sold by the industry that we source from.  This can be used to understand the magnitude of the elements of price that may have been impacted over time, such as cost of raw materials. This is then compared against the supplier’s requested increase for the overall price. This analysis has often shown that suppliers ask for more than is justified and can also be used to ask for price decreases when costs go down.

For an example of how to do this effectively I would recommend the following article: 


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