How do we reduce our cost base, by how much and in what order?
Builds the cost program: separates spend that adds value from low-value spend, then sets the savings range and the order of the cuts.
What you receive
The cost program: the savings range, the levers, the one-off costs and the sequence.
Every cost line divided between the spend customers or the strategy require and the spend to reduce.
When to open it
- Costs grow faster than revenue.
- Your finance team sets a margin target in the budget.
- Integration after a merger needs a common cost baseline.
What the project covers
- Cost baseline by function, activity and cost line
- Value-adding and low-value spend, line by line
- Benchmarks against comparable operations
- Process and procurement levers
- Savings range, one-off costs and the sequence of moves
What your team brings
- General ledger and cost-center reports
- Headcount and payroll cost by function
- Procurement spend by supplier and category
- Process volumes and service levels
- Budget and current savings programs
In your report
- Exhibit 1
Each cost line split into value-adding and low-value spend
Every cost line divided between the spend customers or the strategy require and the spend to reduce.
- Exhibit 2
Savings build up lever by lever, with their timing
The savings range of each lever, its one-off cost and the quarter it takes effect.
Where it applies
- Insurance
How should we redesign claims handling, and which steps do we automate, outsource or keep in-house?
Cost per claim, time to settle and overpayment at each step.
- Industrial goods and manufacturing
How should we redesign our European plant footprint, and can three plants carry the volume of five?
Unit cost by plant, freight cost to customers and the one-off cost of moving production lines.
- Private equity
How do we build the plan for the 100 days after closing, and which value levers come first?
The size and timing of each lever: procurement, pricing, working capital and overhead.
Start with this engagement
Write to hello@tacitude.com with the project you have in mind, and we frame the engagement with your team.