Magazine 06: Cost Optimization - how to get a fresh start



Dear Readers,

Current lockdowns are clearly slowing down the economy. It is currently difficult to predict when the real upturn will come. But experts agree on one thing: There will be no return to the conditions before Corona. To master a perfect fresh start, companies will have to adapt to the new circumstances.

Since many companies suffered revenue losses during the crisis, simply rolling over budgets will not achieve their goals. Companies should re-evaluate their cost structures in the context of the current economic situation and make use of professional measures to reduce costs in procurement. We explain how this works in practice in our cover story. Another factor in gaining more financial freedom of movement is optimizing working capital management. An INVERTO study shows that there is often still untapped potential in this area.

Private equity investors have also recognized the value of large-scale optimization projects in companies. In our desk research, we found that portfolio companies are significantly better off than their competitors in terms of sales and operating profit.

Enjoy reading and stay healthy!

It is now as important as ever for companies to streamline their operations and drastically cut costs to protect turnover and ensure survival.

Determine and leverage your own position

The pandemic has impacted different industries in different ways. On the one hand, there are industries such as aviation, tourism, and gastronomy, which are suffering extremely from lockdown after lockdown. They depend on cutting costs quickly to survive the current phase reasonably unscathed. To make a ‘fresh start’ and be well equipped for the long-term, they need to implement both immediate measures and a sustainable strategy that must be continuously reviewed.

Ensuring an agile procurement department is key, acting on opportunities when they arise and protecting the business from increasing costs and supply disruptions when and where demand outweighs supply.

Adopting a long-term perspective can balance the situation, as can digging into the specific circumstances of the supplier.