Production
Cost reduction programs
Strategic cost reduction programs: Increasing efficiency and securing competitiveness
Rising operating costs and inefficient processes pose considerable challenges for many companies. Particularly in times of inflation, supplychain problems and growing competitive pressure, it is becoming increasingly important to reduce costs and realize targeted cost savings within the company. Without a sound analysis of cost drivers and a systematic approach, key cost-cutting measures often remain unused, which has a negative impact on profitability.
Our cost reduction program helps you to sustainably optimize your cost structure. By precisely analyzing your key figures, processes and data, we identify and evaluate cost-cutting potential in a targeted manner. In doing so, we not only consider operational processes, but also carry out a comprehensive assessment of the entire value chain. With individual cost reduction strategies, we maximize your cost savings and increase the efficiency of your company at the same time. Our cost reduction programs help you to exploit both short-term and long-term cost reduction potential and strengthen your competitiveness in the long term. By selecting and combining the right modules, we develop a customized concept for you that is tailored to your specific needs and objectives. In this way, we ensure that all relevant optimization areas are addressed efficiently and in a targeted manner.
Philipp Kappus
Production Manager
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Would you like to have an analysis of your cost drivers carried out in order to sustainably reduce costs and maximize the efficiency of your company? Then please send me a message. I will get back to you as soon as possible.
Quick Check
Quickly identify cost-cutting potential and point out the need for action
Identifying and realizing cost-cutting potential requires a clearly structured approach that enables both short-term efficiency gains and long-term optimization. In day-to-day operations, however, there is often a lack of an unbiased view from the outside to objectively identify weak points and evaluate cost-cutting opportunities in the company without bias. A sober and analytical approach is essential in order to make well-founded decisions and achieve sustainable results. In addition to obvious cost reduction potentials such as rework costs, hidden costs and the classic “Eh-da costs” are more difficult to identify. There is a lot of potential here in particular, which is uncovered by our proven analysis procedure.
Our Quick Check provides you with a precise and well-founded basis for systematically identifying and systematically realizing cost reduction potential in a short space of time. Using a structured and efficient approach, we analyze your processes and structures on the basis of workshops, interviews and store floor inspections. We uncover weak points and evaluate measures together with you in terms of savings potential and feasibility. The result is a detailed roadmap that provides you with clear recommendations for efficient and sustainable implementation – with a focus on quick results and long-term improvements.
Our service packages:
- Identify cost reduction potential
- Prioritize cost reduction measures
- Developing individual cost reduction strategies
- Create a roadmap for sustainable cost reduction
Your benefit:
- Short-term identification of the relevant fields of action
- Prioritization of cost-cutting measures for rapid implementation
- Long-term increase in efficiency and cost optimization through detailed roadmap
Strategy and KPIs
Development of customized strategies and KPIs for sustainable cost reduction
For an efficient approach to cost reduction programs, it is crucial to link the corporate strategy with the objectives of the cost reduction measures. A precise definition of targets and KPIs that are directly aligned with the corporate strategy forms the basis for sustainable cost reductions and long-term increases in efficiency. A cross-departmental understanding across all employees is also essential. The KPIs should be made transparent and accessible throughout the course of the project and communicated clearly.
Based on your corporate strategy, we jointly define the objectives and framework conditions of your cost reduction program, which serve as the cornerstone for the implementation of effective measures. In workshops, we define the target key figures and analyze which operational key figures influence them. On this basis, we develop targeted optimization measures. We establish a standardized reporting system that monitors the progress of the cost reduction program based on the previously defined KPIs and creates a sound basis for management decisions.
Our service packages:
- Check consistency of departmental targets and KPIs with the corporate strategy
- Ensure strategic alignment of the cost reduction program
- Establish KPI structure for continuous monitoring and adjustment of measures
- Create regular management reports
Your benefit:
- Analysis of your corporate strategy to identify the need for action (cost reduction potential)
- Targeted strategy for your cost reduction program, tailored to your business objectives
- Sustainable strategic orientation for long-term cost reductions in the company
- Transparency of costs across all decision-making levels
Optimization of organizational structures
The optimal organizational structure for your cost reduction program
Successful cost reduction programs require a clear alignment of organizational structure and processes that combine strategic goals with operational efficiency. A Target Operating Model (TOM) describes the optimal target structure of your organization – from the processes and responsibilities to the resources and technologies required to successfully implement your strategic goals. It serves as the basis for setting up your organization efficiently and sustainably.
We work with you to develop a tailor-made target operating model that serves as the central building block of your cost reduction program. By analyzing your existing structures and defining clear processes, responsibilities and resource utilization, we ensure that your cost optimization is sustainable and long-term. With a clear TOM, we create a resilient basis for sustainable savings and efficiency gains.
Service packages:
- Holistically analyze the goals and requirements of your company’s organizational structure
- Evaluate current organizational structure, taking into account business processes, and identify weaknesses
- Develop a target operating model aligned with your cost reduction goals
- Define clear processes and responsibilities for targeted implementation
Your benefit:
- Optimized organizational structure that is precisely aligned with the savings targets of your cost reduction program
- More efficient workflows thanks to clearly defined responsibilities and processes
- Sustainable savings through long-term organizational and structural adjustments
Production costs
Transparent manufacturing cost analysis for efficient cost reduction in the company
Complete transparency and a focus on manufacturing costs is essential for the efficient implementation of a cost reduction program. It is necessary to consider the total cost of ownership (TCO) and overheads in order to obtain a complete picture.
By analyzing all relevant cost centers and preparing a cost of sales calculation, we create the necessary transparency to set the right focus in the cost reduction program and to be able to quantitatively evaluate the potentials and measures. We use methods such as the PHEK system for this. In addition, we carry out a comprehensive end-to-end cost analysis that includes the entire order fulfillment process as well as the order-to-cash process. Through targeted cost center structure analyses and the use of multi-moment and value stream analyses, we systematically identify potential for cost reduction. Based on these findings, we develop tailor-made strategies to optimize your cost structure and realize long-term cost savings in the company, especially in manufacturing costs.
Our service packages:
- Analyze production costs and TCO
- Carry out an end-to-end cost analysis of the entire production and supply chain
- Apply multi-moment and value stream analysis
- Compare manufacturing costs with industry standards
- Implementing best practices
Your benefit:
- Transparency about your production costs
- Sustainable reduction in manufacturing costs
- Improved competitiveness through systematic cost optimization
Manufacturing Footprint
Strategic optimization of your production network to reduce production costs
An inefficiently designed production network often leads to high operating costs, long transportation routes and unused capacity. Companies are faced with the challenge of strategically aligning their production sites, as increasing market requirements, global competitive conditions and growing cost pressure require continuous adaptation. The balance between cost reduction, flexibility and sustainable cost optimization is crucial in order to successfully adapt to changing market requirements.
We comprehensively analyse and evaluate your existing production network, identify weak points and develop optimization scenarios. In the short term, we focus on increasing efficiency by optimizing capacity utilization and reducing overcapacity. In the long term, we develop strategic solutions for consolidating, relocating or setting up new production sites in order to reduce costs within the company and sustainably increase the efficiency of your production capacities. In doing so, we consider “make or buy” issues and scrutinize the diversity of variants and complexity.
Our service packages:
- Analyze and evaluate existing production network
- Develop optimization scenarios for the production network (consolidation, relocation, establishment of a new production facility)
- Reallocation of production volumes between existing or new locations
- Reduce product and process complexity
- Determining the optimum depth of added value
- Maximize site utilization and minimize overcapacity
Your benefit:
- Reduction of site and operating costs
- Consolidation and realignment of production capacities
- Maximizing capacity utilization through targeted adjustment and relocation of production volumes
- Strengthening the market position through optimally positioned and strategically aligned locations
- More efficient supply chains thanks to reduced transportation routes
Process- and product-based advanced analytics
Data-based analysis and optimization of processes and products to increase cost efficiency
Conventional analysis methods such as interviews and value stream mapping reach their limits in some cases and do not uncover all relevant cost reduction potential. Without the use of targeted and comprehensive analysis tools, many optimization opportunities remain unused, leaving valuable cost reduction potential untapped.
In addition to traditional analysis methods, we use advanced analytics to analyze your processes, your data and your product portfolio holistically. With process mining, we uncover inefficiencies in your processes and optimize them, while product mining helps to reduce the complexity of your portfolio. Simulations and scenario planning provide you with precise information that enables you to make well-founded decisions to sustainably improve your cost structure. We also evaluate the use of Robotic Process Automation (RPA) to automate recurring processes, increase efficiency and reduce personnel costs.
Our service packages:
- Analyze inefficiencies
- Optimize product portfolio
- Reduce complexity
- Developing data-based simulations
- Little effort required to provide the data due to standardized queries
- Automate recurring processes with robotic process automation (RPA)
- Reduce personnel costs
Your benefit:
- Precise insights into cost drivers and optimization potential
- Long-term cost savings through automation of recurring tasks with RPA
- Reduction of process and structural complexity
- Sustainable reduction in operating costs
- Reduction in personnel costs
Planning and control processes
Efficient planning and control processes for better use of resources
Inadequate planning and control processes can lead to high inventories or unused capacity, which results in unnecessary costs for the company. The aim here is to establish precise demand forecasts and optimized capacity planning in order to use valuable resources more efficiently and increase competitiveness. Effective planning and control processes are crucial for creating transparency and eliminating inefficiencies in a targeted manner.
We analyze the systematics of your planning and control processes in order to identify hidden potential and realize targeted efficiency increases that both reduce costs and improve planning accuracy. Through more precise demand planning and optimized capacity allocation, we improve your use of resources and reduce inventories. Together with your employees, we develop and evaluate various scenarios to analyze the impact of logistical factors such as an increase in batch size on storage costs and other relevant variables.
Our service packages:
- Analyze and optimize existing planning and control processes
- Improve demand planning and capacity allocation
- Optimize planning accuracy and resource utilization
- Calculate and evaluate scenarios to increase efficiency
Your benefit:
- Increased planning accuracy
- Increased efficiency through optimized planning processes
- Improved capacity planning
- Cost reduction in production
OPEX – Operational Excellence as part of your cost reduction program
Operational excellence as the basis for sustainable cost reduction and process optimization
Inefficient workflows and unused capacities inevitably lead to hidden costs in production processes. Without the consistent implementation of Operational Excellence (OPEX), valuable efficiency potential that already exists in the minds of your employees remains untapped. In the face of growing cost pressure, it is crucial to systematically optimize processes in order to achieve sustainable cost reductions and long-term efficiency gains.
We examine the potential offered by the application of OPEX methods in your individual case in order to achieve targeted increases in efficiency and thus realize sustainable cost reductions. We also capture valuable ideas from your employees at store floor level and integrate them into structured processes. In this way, we optimize material flows and create lean processes that increase your process efficiency and sustainably reduce operating costs. By defining KPIs, we ensure that the measures are measurable and that long-term cost reductions are achieved within the company. We effectively integrate the cost reduction strategies into your company processes and ensure lasting increases in efficiency across all levels.
Our service packages:
- Analyze production processes
- Identify cost drivers and waste
- Introduce OPEX program to promote a culture of continuous improvement
- Optimize material flows and reduce waste
- Establish precise KPIs for monitoring and controlling optimization measures
Your benefit:
- Reduction in production costs
- Increased efficiency through optimized processes
- Reduced scrap and waste
- Measurable results through continuous monitoring
Implementation of measures
Efficient implementation and sustainable integration of your cost-cutting measures
The implementation of a cost reduction program requires structured priorities, targeted processes and a precise evaluation of necessary projects. The cost-benefit matrix is used to evaluate and prioritize the measures with the best cost-benefit ratio. Measures must be clearly aligned with the company’s objectives and flexibly adapted to changing requirements in order to fully exploit long-term savings potential and efficiency gains.
We support you in implementing your cost reduction measures as part of a comprehensive cost reduction program. With the help of a detailed assessment and a well-founded roadmap, we prioritize the measures on the basis of figures, data and facts to ensure their measurable and effective implementation. Through continuous monitoring and the close involvement of your employees, we maximize cost reduction potential and ensure the long-term success of the measures. Our change management and implementation support guarantee that the measures are not only integrated operationally, but also gain the necessary acceptance among your employees. In this way, we maximize the long-term success of the cost-cutting strategies and ensure that the efficiency gains are permanently anchored in your company processes.
Our service packages:
- Evaluate and prioritize identified measures
- Develop roadmap
- Supporting the implementation of cost reduction measures in your existing processes
- Continuous monitoring of cost-cutting measures
Your benefit:
- Efficient implementation of cost-cutting measures
- Maximizing the savings potential
- Continuous review and adjustment of measures
- Sustainable integration of the measures into your processes
- Long-term cost reduction
What are the benefits of an individual cost reduction program?
A tailor-made cost reduction program optimizes the cost structure in the long term, increases efficiency and improves competitiveness through targeted savings measures.
Why does optimizing the organizational structure make sense as part of a cost-cutting program?
Optimizing the organizational structure is particularly effective as part of a cost-cutting programme, as it uncovers and eliminates inefficiencies. Unclear responsibilities, duplication of responsibilities and too many hierarchical levels often lead to unnecessary costs and delays. A realignment can streamline processes, simplify structures and deploy resources in a more targeted manner. This not only reduces operating costs, but also increases the agility and efficiency of the company.
What is meant by the forecast manufacturing costs (PHEK) system?
The predicted manufacturing cost process (PHEK process) is a method for the early and continuous determination of the expected manufacturing costs of a product throughout its entire development and production cycle. The aim of the process is to enable cost control and optimization as early as the development phase through well-founded forecasts and regular updates.
