Automotive
Optimising EBIT through Strategic Cost Reduction in Surface Engineering Solutions
Client Challenge
Our client, specialising in surface engineering solutions, robotics & automation, and high-performance springs, operates manufacturing facilities in Mumbai and China. They sought to enhance EBIT by focusing on direct cost optimisation across product lines and customer segments.
Our Approach
- Procurement Spend Analysis:
- Analysed procurement spend across four business units to pinpoint areas with high cost impact and potential for improvement.
- Segregated spend data to identify actionable opportunities.
- Internal Engagement:
- Collaborated with internal teams to assess current cost reduction initiatives and their effectiveness.
- Aligned existing initiatives with overarching cost optimisation goals.
- Kraljic Matrix Application:
- Used the Kraljic matrix to categorise procurement spend into bottleneck, strategic, routine, and leverage categories.
- Prioritised areas for cost reduction based on strategic importance and potential EBIT impact.
- Expert Interviews and Best Practices:
- Conducted expert interviews and primary research to identify industry-leading procurement practices.
- Formulated recommendations based on industry benchmarks and proven strategies.
Our Impact
- Validation of Cost Reduction Initiatives:
- Verified current initiatives to ensure alignment with organisational objectives and EBIT enhancement goals.
- Insights Deck:
- Developed an insights deck addressing key aspects of cost optimisation, highlighting opportunities, risks, and actionable steps.
- Provided a roadmap for implementing cost reduction measures and driving EBIT improvement across business units and customer segments.