Comprehensive cost reduction program for a construction company
Objective was to cut costs while strategically diversifying the supplier base to reduce dependency on a set of suppliers which were specifically critical to operations and were aggressively increasing their prices.
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Context
- Client is a leader in sale and rental of temporary infrastructure and accommodation
- Scope included all categories with significant spend, mostly external subcontracting, industrial equipment rental and various transportation services
- Objective was to cut costs while strategically diversifying the supplier base to reduce dependency on a set of suppliers which were specifically critical to operations and were aggressively increasing their prices
Our approach
+100
Worked very closely with internal Operations and Sales & Marketing to ensure alignment from the start. Built a detailed spend database out of hundreds of PDF-based invoices/documents by leveraging software tools.
+30
Scanned and engaged >100 alternative vendors and explored >30 potential improvement ideas, left no stone unturned
KPI's
Carefully planned introduction of new vendors while preserving business continuity and rigorously tracked implementation through a detailed monthly KPI dashboard
The impact of our
expert involvement.
8 to 16%
Captured savings vary by category, ranging from 8% to 16% and realizing 11% overall. Further potential is being addressed next year.
50%
Roughly half of all savings stem from unit price reduction/price renegotiation, remainder is linked to a variety of levers such as operational productivity improvements, selective insourcing of activities, portfolio standardization, requirements review, etc.
100% continuity
Results were achieved while fully maintaining business continuity, even with the very strained relationship with some vendors
Benefit
11%
Overall
savings
