Page 22 - Industrial Technology EXTRA - Brexit Briefing

BREXIT BRIEFING

Every organisation can make

savings to secure their future

New research from PA Consulting shows OPTIMISATION PERFORMANCE BY RANK
organisations across a number of key industries 1. Automotive
have a significant opportunity to reduce costs 2. Life sciences
3. Industrial engineering
As organisations look to position themselves organisation and govern-
for the future following the Covid-19 crisis, ance, processes, tools, 4. Energy and utilities
research from PA Consulting, the global competencies and skills, and 5. Consumer products
innovation and transformation consultancy, methodologies. Falling short
shows that leaders across sectors have an in even one area can limit an 6. IT and telecommunications
untapped opportunity to significantly reduce organisation’s overall 7. Defence and aerospace
costs in their organisation. success on a sustained
basis 8. Financial services
With GDP forecast to contract across the 9. Transport
globe and as organisations grapple with the PA’s research identified that
challenges of the Covid-19 crisis, the the weakest areas across 10. Government and public sector
process of removing costs from sectors are strategy (a
organisations has never been more comprehensive vision for managing costs 1. Look beyond single cost-out levers: The
important. PA’s research, which is based on sustainably) and methodologies (methods full potential of cost optimisation comes
a survey of 180 industry leaders across ten for benchmarking cost reduction). This is when it is established as an every-day activity
sectors, demonstrates that every sector has concerning because both areas were also and not as a loose set of actions to take in
an opportunity to optimise costs and create deemed to be among the most relevant to uncertain circumstances for short-term
competitive advantage. The automotive success. Their relevance and current impact – for example, cutting head count in
sector remains the best performing sector in weakness lead to cost-out efforts response to a drop in profitability. The better
terms of cost optimisation. underperforming. an organisation is at all six dimensions, the
more successful its cost optimisation.
According to PA’s research, six dimensions There are three key steps for improving cost-
are vital to optimising costs: strategy, out results: 2. Design your organisation for simplicity:
Successful organisations are simple,
empowering people to make decisions and
creating a flat organisational structure. A
simple business design makes it easier to
understand how costs flow through the
various functions in an organisation and to
identify potential cost savings.

3. Don’t fear emerging technologies and
ways of working: While less tried and
trusted methods may seem more
challenging, they offer the greatest potential
to reduce costs. This is where you can steal
a march on the competition.

Shanton Wilcox, Global operational
improvement and manufacturing expert at
PA Consulting says: “A new ‘always-on’
attitude to cost optimisation will help
organisations emerge stronger and ready for
the challenges ahead. Done well, cost
optimisation doesn’t just protect
organisations during uncertain times. It
identifies ways to increase margins, gain new
product insight and unleash innovation. It
presents an opportunity to rejuvenate an
organisation – increasing collaboration and
empowering people to cut costs in creative
ways. It changes the way organisations think
about costs.”

22 WINTER 2021 – INDUSTRIAL TECHNOLOGY EXTRA