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Keeping a cap on costs to ease impact of economic conditions

Find out how Third Horizon helped this household products manufacturer find opportunities to further reduce costs in the face of significant, continued pressure from deteriorating economic conditions.

Background
A leading Australian manufacturer, importer and distributor of household products had substantially restructured its supply chain, with a reduction in domestic manufacturing offset by a shift to offshore third-party sourcing. With revenue and earnings under continued pressure from economic conditions, our client was looking to identify further opportunities to reduce costs. The organisation consisted of five distinct businesses, with minimal involvement at the Group level to manage the businesses.

Our Role
Third Horizon was engaged to review overhead cost structures in three of the business divisions. Interviews were conducted with representatives of the key overhead categories across the three divisions. Financial data was analysed to validate a series of hypotheses related to potential areas of improvement and benchmarking was performed internally between the divisions and with relevant external comparison organisations.

We identified a series of improvement opportunities, which were grouped into four main categories:

  • Sales Force Effectiveness
  • Order Management
  • Marketing and R&D alignment
  • Other Overhead Categories

Results
Improvement initiatives were presented to the steering committee, which broadly agreed to proceed with all areas proposed. Specific opportunities for immediate improvement were agreed and work has commenced on addressing these opportunities.

Additional information