Do you have a cost conscious culture?
In reviewing a few of my colleagues postings from around the world the following quote from an associate in the UK reminded me very quickly of the core value in developing a cost conscious culture.
"A pound of new sales generates a few pence of profit. A pound saved goes straight to the bottom line."
So how do you sustain a healthy bottom line when you probably feel you have done so many things already?
As with anything you have to maintain a focus, and get buy in from all areas of the business. In a recent presentation at our European Conference this was described as "Operational Fitness" and developing a cost conscious culture is very similar to personal fitness campaigns – you have to keep working hard at it to stay on track. It all starts by leading from the front.
Have you had a sustainable process to discover savings that could be found in the bottom third of the purchase ledger? These items, which can often add up to significant amounts of money, can go un-noticed and yet I am sure that there always seems to be more important things to focus on.
The following tips offer some simple ways of making a real difference to the health of your bottom line without compromising service levels:
• Create a “cost-conscious” culture, where senior staff lead by example and all colleagues are encouraged to balance value for money against the operational requirements of the items they purchase.
• Manage your major contracts carefully, highlighting end dates and notice period. Always tender your contract before the roll-over to ensure you are getting the best deal from your suppliers.
• Instigate a proactive energy-management process. Avoid simply reviewing incumbent suppliers and instead investigate the market and benchmark against your peers.
• Finally, always look for new cost-saving ideas – even when you need them the least.
By focusing on these areas, you can develop your cost conscious culture and be well placed for a financially successful future.
With more than 750 experts in more than 30 countries Expense Reduction Analysts is one of the world’s leading cost management consulting practice. We specialize in finding savings for organizations across the world through a proven cost management process. Since 1992, we have help thousands of organization improve their bottom line and free valuable budget to fund their development. Our clients include small and medium sized firms as well as not-for-profit and public sector organizations and global players.