WEBVTT

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(dramatic music)

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<v ->Creating competitive cost advantage</v>

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is all about utilizing your costs to invest in the future.

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Looking at cost reduction simply as a means of survival

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misses the opportunity to reinvest for future growth,

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stability, and strategy.

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(dramatic music continues)

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Reducing cost is actually about freeing up resources

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to invest in important strategic moves,

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growth for the future,

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building capabilities in the team,

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and critical initiatives like climate and sustainability.

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(charging lead clunking into connection port)

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In order for leaders to determine

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which cost reduction approaches are right

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for their organization

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given the current context,

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they have to answer questions like

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what is the magnitude of savings they require?

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How quickly do they want savings

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to come out of the organization?

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Are they willing to make tough decisions

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about labor, operating model,

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and fundamental core processes?

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And where is it viable

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to actually reduce procurement cost and spend,

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given things like regulatory requirements, customer needs,

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and supply shortages out in the market?

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(dramatic music continues)

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The quickest way to savings is to look at things like layers

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within your organization,

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and aim to reduce indirect labor costs.

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Next, you can move towards procurement spend,

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both direct and indirect.

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If you're willing to go a little more strategic

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then you can look at your operating model,

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fundamental functional handovers,

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and processes that transverse those functions.

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And finally, the most strategic

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and holistic approach is to look

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at an end-to-end operational transformation

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and actually reduce complexity,

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optimize on things like design to value

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and take a digital thread through your organization.

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(dramatic music becomes brighter and softer)