tsmg

One of India’s largest automobile manufacturing companies was losing its competitive edge due to high material costs and total cost of ownership. Integrated cost reduction, through a “cross-functional” approach, effectively amplifies the effect of cost, quality and time savings by concentrating on individual areas. This concept involves a simultaneous focus on the product, and the value chain that creates it.

Setting aspirational targets, design to cost, product commonality, optimizing supplier base, lean value chain and content optimization are levers on which ICoRe works. The methodology involves a diagnostic phase (to assess the potential), target setting phase (aspirational targets), idea generation and evaluation phase (involving client cross functional teams, internal/external benchmarking) and syndication phase (sign-offs from key stakeholders). A tracking and control team is also put in place to ensure systematic and rigorous implementation.

The client witnessed a cost reduction of around 13-14 per cent in the material cost base amounting to Rs 270-280 crore. The client was also able to change its management platform through a cross functional approach and focus on quick wins. A pool of strong client side facilitators was formed, enabling delivery on immediate programs and creating a leadership capacity for future changes.