Cost Reduction,
some potential improvements.

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procurement cost reduction

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additional annual procurement saving

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overall productivity

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marketing cost reduction

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direct mterials

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logistics cost

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inventory reduction

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improved capacity realization

Looking for a cost reduction?

Nowadays, almost any industry is facing strong competition which is eroding importantly the company profit. Your company can work extremely hard to obtain one extra incremental dollar of revenue. Gaining that extra revenue dollar will be uncertain, and it will be difficult to attain the targeted profit. Alternatively, a cost reduction of one dollar will have much more impact on your profit than one extra dollar of revenue. Furthermore, cost reduction is entirely within the control of your company, whereas a revenue increase is not. In Strategok, we offer you additional cost reductions initiatives to complement the ones that you have already in place. Thus, you will accelerate your cost reduction and profit improvement.

procurement cost reduction

Procurement has the potential to materialize a quick positive impact in the company bottom line. There are industries in which purchasing cost could raise up to 80% of the firm cost structure, and procurement cost reduction could get around 8% – 12% cost savings. In Strategok, we support you to materialize those potential savings.

  • spend analysis
  • MRO analysis
  • total cost analysis
  • category management
  • reverse auctions
  • outsourcing
labor cost reduction

The payroll is one of the largest company expenses. One of the focus of this area is to improve the productivity while the company is growing. So, the goal is that the payroll and headcount grow slower than revenue. We think that workforce reduction should be the last option to improve the labor cost. Nevertheless, If the company downturn is of uncertain duration and liquidity is questionable, then a company may have to act quickly.

  • employee turnover
  • productivity analysis
  • busting bureaucracy
  • outsourcing
  • layoff analysis
selling & marketing cost reduction

Reducing the investment on sales and marketing will probably reduce the company revenue too. So, the goal of this area is reapportioning to enhance the effectiveness and efficiency of the selling and marketing area in order to maximize the company profitability.

  • customer analysis
  • price optimization
  • cost to serve analysis
  • sales productivity analysis
  • sales effectiveness analysis
  • marketing efficiency & effectiveness
product analysis

Products should be profitable but the experience tell us that is quite common to find unprofitable products into the company product and service portfolio. Those unprofitable products counteract the positive effect of profitable products. Thus, unprofitable products use to impact importantly in the company bottom line. In Strategok, we use accounting and supply chain tools to improve products profitability.

  • product profitability analysis
  • target costing
  • value engineering
  • production cost
  • total supply chain costs
  • cost of poor quality
  • lean costing
inventory reduction

Inventory is probably one of the company’s largest assets. However, there are some people who consider a liability rather than asset because inventory become obsolete, not all of it is necessary to produce revenue, and its value used to be constantly declining (shrinkage, damages). So, the Strategok objective is to support you to keep inventory levels as low as possible without damaging profitability.

  • inventory turnover
  • stock level analysis
  • volume purchasing
  • lean approach
  • reliable & responsive supply chain
  • risk pooling
fixed asset reduction

In our experience, most companies use the Net Present Value (NPV) analysis, whichever purchasing of fixed assets promise the greatest potential cash flow. This method can lead to serious funding misallocations, when investments should instead be focused on enhancing total throughput (revenue minus totally variable expenses), flexibility and agility. Strategok analyze the options and benefits of fixed asset reductions.

  • assets turnover
  • bottleneck ops analysis
  • outsourcing strategy
  • capital budgeting
  • facility expansion analysis
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Looking for a cost reduction?