Focus on Costs Programme

Posted at: September 7, 2020 Posted in: All, Strategic Focus on Costs Programme

The ‘Focus on Costs’ Programme came from our thinking on the way into the 2020 COVID-19 crisis.

As the crisis struck during early March and we moved into full lock-down we pulled together a series of articles that built into a 10 point programme for reviewing and reducing costs whilst maintaining supply chain resilience.

Part 1: Time to Focus on Costs

When crisis or uncertain times strike, sales numbers suffer. For most businesses, there is little opportunity for revenue growth – so reviewing the cost base is the best opportunity for creating value on the bottom line.

Part 2: Introduction to Cost Base Segmentation

Where should our focus be drawn when it comes to reducing third-party costs? The answer lies in some old school, back-to-basics models and keeping it simple.

Part 3: Tactical Quick Wins

Picking up from the models introduced in Part 2, we look at the categories of spend that are likely to yield results quickly. We talk about the approaches to take, the choices to make and tactics to employ.

Part 4: Tactical Longer-Term Wins

Moving further into the models we’ve already examined we look at another area of opportunity. This area frequently benefits from attention due to the level of spend involved.

Part 5: Strategic Procurement

Strategic Procurement covers those categories of cost which provide significant risk to the ability of a business to conduct its operations should a supply arrangement fail or be withdrawn. Care and attention is required and cost may not be the key criteria.

Part 6: Power Regimes and Supplier Perception

This part focuses on the nature of relationships between buyers and sellers and specifically upon the concept of Relative Power and the perception of suppliers – about you as a customer – for the spend category in question.

Part 7: Procurement Fundamentals – The Building Blocks

There is more to cost management than delivering savings – although that is often the primary focus. There is much more to consider to ensure that you can deliver savings and resilience initially and then ensure that good practice becomes business as usual.

Part 8: Stakeholder Management

Making it happen – internally and externally – means identifying, engaging and managing all of the stakeholders in the procurement process. We share some tools and techniques to help with this critical step.

Part 9: Enlightened Approach – Business Perspective

If the previous steps have focused very much on a procurement perspective to addressing third-party spend. In this step we look at the opportunities that the current situation presents to create savings or deliver value.

Part 10: Business Wide Enlightened Approach – External

The final step in the series is aimed at Focus on the Bottom Line. This is about simultaneous realisation of dramatic cost reduction and increased value from your suppliers. We refer to this concept as Enlightened Procurement.

If you have any questions about any of the articles or have case studies using these ideas or merely want to discuss how these concepts can be applied to your please do not hesitate to contact me:

Jonny Michael

CEO JMCL Consulting Limited

Focus on Costs Programme