Sustainable Cost Reduction

Do you want to deliver more cost savings in a sustainable manner ?

Reducing cost in a sustainable manner is a question of approach and follow-up
  • Our cost reduction workshops are essential tools to enable sustainable cost reductions.
  • We have helped organization across the globe to identify and deliver cost reductions in a sustainable manner.
  • Our clients got alignment, security of delivery and peace of mind, based on a committment of their internal teams.

Sustainable Cost Reduction Primer from Michael D’heur

The Challenge: Deliver more, with less
The competitive environment for many organizations requires to continually reduce cost across multiple dimensions: product, operations, organizational, sustainability related. Managers are asked not only to deliver short term cost savings, but to build a platform to deliver continious cost reduction.
Our Solution: Utilizing the power of cross-functional teams to build smart and deliverable cost savings

One key success factor is how a continuous cost reduction approach is embedded in an organization. Unlike many other cost reduction approaches that favor short-term success instead of mid-/long-term viability, our continuous cost reduction approach is focused to deliver smart cost savings that are sustainable.

shared.value.chain specializes in conducting tailored workshops to identify tangible cost savings that are sustainable and that take all dimensions of value creation into account (Economic, Ecologic, Societal).
We always challenge the status quo of current cost cutting approaches, because there is a better way to get to the results: through cross-functional leadership and team work (utilizing the biggest asset of an organization: the people).
Our approach brings together cross-functional teams to review and implement opportunities along the entire lifecycle of a product/service and the entire value chain. Focused delivery of identified cost savings opportunities provides a platform for sustainable future growth.

Typical workshop structure

The 2-3 day workshops generally follows a predefined structure: Assemble available data (customer requirements, quality, productivity, costs), map (outline) the product / service and the processes, analyze data – fill gaps, brainstorm improvement opportunities, refine and prioritize ideas, quantify recommended improvements, present results

Sample workshop focus areas

Individual workshops focus selectively on customer needs, value-added, product / service design, business processes, costs, quality, etc. We work with cross-functional client teams to conduct value chain strategy, sustainable cost reduction and process improvement (or problem solving) workshops to improve economic, ecologic and societal business performance and profitability.

We apply our own and industry best practice concepts and techniques, including: Shared value opportunity analysis, Value chain analysis, Quality Function Deployment (QFD), Total Cost of Ownership (TCO), Design to Cost, Design for Manufacturability / Serviceability (DFM), Supply Management, Cycle Time Reduction, Lean Manufacturing are selectively applied “hands-on” and yield immediately implementable results.

Cost Reduction: Cost Reduction workshops focus on material, labor, and overhead costs at the business or product line level. Workshop preparation includes assembling relevant material costs (including out-sourcing) and labor costs both direct and indirect. Breakdowns may also be by product line, customer, location, or supplier. Quality costs, rework, value-added data are also collected. A multi-functional team assesses the cost, quality, and productivity data and brainstorms solutions based on cost, Lean Thinking, supply management, productivity, and quality concepts. High opportunity areas are evaluated and prioritized.

Value Analysis (VA): Value Analysis workshops follow a similar process at the product line level. Detailed product / service data is collected and analyzed by a multi-functional team that contains workers or supervisors (or has ready access to them). More attention is usually placed on process performance — productivity, quality, cycle time. Brainstorming develops consensus on detailed solutions for product / service re-design and process re-redesign. The benefits and costs of high potential solutions are quantified. Many solutions are quickly and easily implementable.

Process Improvement: Improvement efforts in the service industry and in business processes generally focus on improving process productivity, quality, and cycle time. Intangible customer needs (ease of use, trust, etc.) are quantified, Critical Success Factors (CSFs) are determined, and performance is evaluated. The process is mapped and quality issues are examined. Brainstorming is used to resolve issues, eliminate non-value added activities, and reduce cycle times. Action plans are developed for high priority recommendations.

New Product Development (NPD): Reducing the time to market for high quality new products is the goal of the New Product Development (NPD) Workshop. This can be approached from the viewpoint of examining NPD as a process itself or by undertaking the development of a new product / service. When examining NPD as a process, a multi-functional team quantifies the customer and business requirements of the process. The existing process is mapped and its effectiveness is examined — resources expended, timeliness, sigma level of product and process. Competitive performance and Best-In-Class processes are evaluated. Improvements required to meet business goals are brainstormed and refined. Consensus is achieved on a revised NPD Process. The development process can also be examined in the course of developing a new product / service. Business and customer requirements are quantified using the QFD process (described below). The development process is mapped with emphasis on verification of product and process performance to CTQs and costs. A consensus timeline is developed.

Quality Function Deployment (QFD): A multi-functional team of marketing, design, product line / program, customer contact (customer service, service, etc.), and other key product / service personnel examine customer and business needs. In-depth customer information may include market surveys, focus groups, and other market research information. Key customer requirements such as quality, delivery, and functional performance are ranked. Performance to the competition is evaluated. Critical product and business process characteristics (CTQs and CSFs) to meet these requirements are determined. A CTQ map for the product and processes is developed.

Re-engineering: Business or major process re-engineering focuses on aligning personnel activities with business strategies. The value of key activities is assessed. Additional performance information can be collected using Performance Reviews, Activity Analysis Surveys. In a Performance Review, an independent team interviews a cross-section of employees and assesses performance against the Baldrige Total Quality criteria, other quality standards, or a customized set of criteria. Improvements needed in key business processes are identified. An Activity Analysis Survey is a low cost Activity-Based Costing (ABC) snapshot of the value-added in individual processes and activities — it does NOT require changing the financial system. Employees fill out a short (coded) survey on how they allocate their time and assess the value of the tasks which consume their time. The statistically aggregated results are analyzed to highlight low value activities. A team of key managers and professionals analyze the statistical results and suggestions to identify value and cost improvement opportunities. A workshop is conducted to develop and prioritize a consensus list of value and cost improvement opportunities. As part of the workshop we will also work with your team to agree and commit to a set of actions to deliver the identified opportunities.

We are there for you

To arrange a workshop, discuss your specific needs or to obtain more information call us at +49 89 461 331 686 or mail us at info[at]

Michael D’heur
Expert for Strategy, Product Development, Supply Chain, Sustainability, Digitalisation