In our experience, cost reduction of some magnitude is available to most organisations but frequently gets missed, primarily due to a lack of resources, as most businesses are understandably reluctant to ramp up their staff overheads.
The main areas of expenditure on which we work tend to be indirect costs. This is because, in our experience, these usually have the greatest potential for cost reduction.
However, we frequently identify cost reductions from clients’ direct inputs, such as engineering supplies and raw materials, as well.
Examples of indirect categories that we are asked to address most often include:
- accommodation
- alarms and CCTV
- catering
- cleaning
- couriers
- financing
- freight
- fuel
- general stationery
- insurance
- IT
- IT consumables
- leasing
- lubricants
- marketing
- oils
- packaging
- photocopying/reproduction
- plant hire (FLTs, skips, cranes)
- postage
- print/printing
- printed stationery
- protective clothing/equipment
- recruitment
- rent and rates
- security
- telecoms (fixed line, mobile)
- temporary/agency staff
- training
- travel
- tyres
- uniforms
- utilities (electricity, water, gas)
- vehicle hire
- vehicle maintenance
- waste disposal.
Please note that this list is not exhaustive. We consider any areas of recurrent expenditure except wages and salaries.