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Strategic Cost Management

Gestao de custos

We currently live in an extremely volatile economic and business environment. Companies around the world are increasingly facing internal and external challenges, seeking to profitably sustain their businesses. In this context, successful companies are changing their approach to cost and control structuring. The pace of change requires organizations to develop a multifaceted and renewable cost competency.

Analyzing all costs and expenses (direct and indirect) is necessary. For this, having a holistic view of the organization, aligned with the reality of external pressures and long-term goals, is the best way forward.

Many cost reduction methodologies or tactical solutions have failed in many organizations to deliver planned reductions to the cost base. Thus, they did not contribute to the creation of a true competitive advantage in the long term, also causing considerable damage to the corporate structure, image, culture and morale of employees.

“Cost is a strategic issue”. It needs to be continually optimized in the context of the organization's entire business model. Often, the business model itself may need to change to ensure the organization remains competitive. The ability to manage and reduce operating costs by allocating budgets correctly is critical for organizations to survive and grow.

Furthermore, the impact of cost-cutting measures on the people who have to live with them must be considered. Arbitrary cost-cutting activities can generate uncertainty, anger, and resistance, which, over time, will undermine the success of such programs. Cost management not only has to be treated as a strategic issue, but as a change that needs resources and support from the main manager, along with an inclusive and collaborative approach.

The execution of any business strategy must be carefully managed to ensure the right balance between revenue growth and cost. Management needs timely, quality information to understand and appreciate the true profitability of customers and products.

Our methodology

We take the investment approach to managing costs. We seek to strike a balance between a competitive cost structure, profitable strategic execution and business continuity. This work model provides a robust response to the challenge of strategic cost management.

With our cost reduction methodology, we work for our clients to accelerate the possible gains in their results, improving and strengthening their strategic vision.

- Initially we diagnose, together with our customers, the main savings opportunities.

- This work basically takes place in the functional areas through interviews, document analysis and analysis of the company's processes and activities, covering the possibility of increasing revenue (price, sales effectiveness), cost improvement (product complexity, purchase cost , manufacturing, supply chain, information technology, capex management).

- We work together with the organization, mobilizing it for the next changes in a collaborative way in all its functions and addressing the constant needs of the search for results. At this stage, we work with internal projects, seeking involvement and quick returns.

- With the management team, we elaborate a personalized plan to achieve the objectives that are being defined, applying world-class management tools and methodologies. The cost reduction and improvement process needs to be carefully conducted in order to adapt the company to the global challenges of competitiveness.

- At deployment, building cost metrics is only part of the process. Our main objective is that the company's leaders start to think and act differently, consolidating the established changes and making them become deeply embedded in the organization. Our systematic monitoring helps companies assess the distortions that occurred during the process and seeks new ways of working and appropriate measures.

Gestão de Custos
Benefit of the works:
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- Keep cost under continuous observation through key performance indicators;
- Possess effective decision-making processes at the operational level by rigorous cost accounting;
- Execute strictly focused, tactical cost reduction projects under an effective project management discipline;
- Ensure the fulfillment of objectives through a robust management of suppliers;
- Understand the net profitability by customer, product, market and channel;
- Continue to challenge the business model to shape investment options;
- Ensure that areas or segments with low customer or product profitability are understood and continuously addressed;

Gestao de custos
Gestao de custos

- Ensure that one of the company's sources of growth can be through effective cost reduction;
- Systematically monitor the execution of the strategy through effective performance management tools;
- Incorporate a culture of awareness in cost management and organizational value creation;
- Actively monitor the customer experience and the market, being able to effectively assess the costs of responding adequately to changes;
- Continuously monitor complexity throughout the business, constantly seeking to simplify execution, while improving internal and external service delivery;
- Recognize that employee satisfaction and performance drive financial success and value creation.

Valíni Consulting & Training seeks, with its methodologies, to help companies, in a number of sectors, to introduce an integrated approach to cost management. This ensures that our clients successfully deal with strategic, cost, investment and financial decisions. For more information contact us by phone and email below.

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