CONTEXT

A leading Australian FMCG manufacturer was seeking to reduce overhead costs in response to revenue and margin pressure in its core categories.  CACE Partners was engaged to assist the client reduce its overheads without damaging the business and in a way that didn’t alienate staff and destroy culture and goodwill.  Specifically, the client wanted to ensure the savings were reasonable and sustainable, reflective of the environment in which they operated.

INSIGHTS / APPROACH

The CACE Partners collaborative cost reduction approach was deployed to ensure management and staff were involved throughout.  Key process steps included –

• Agreed the savings target and supporting rationale
• Understood the business strategy for the next 3 years, to ensure resulting cost structure was aligned
• Broke the target down by business area and cost centre, adjusted to align with strategy
• Ran a series of workshops with management to develop savings hypotheses
• Applied a transparent and consistent risk assessment framework to all savings, aligned to business strategy
• Worked with the executive team to agree which savings were considered low or moderate risk, and which would only be pursed in the case of a ‘gloom’ or ‘doom’ scenario
• Built analytical support to quantify savings over following 3 years & steps required to implement
• Built implementation plans for all approved savings initiatives and supported finance team to load budgets
• $24M (21%) total, risk assessed savings identified, with $22M (19%) loaded into budgets

RESULTS