SG&A Optimization
Strategic SG&A Reduction: Driving Cost Savings Without Disruption
Reducing SG&A (Selling, General, and Administrative) expenses is often one of the most effective strategies for improving a company’s competitiveness. These costs are considered indirect, meaning they are not directly tied to production, which makes them a prime target for optimization without disrupting core operations.
Assess
Plan
Once an assessment is complete and potential optimization areas are identified, the next phase involves developing a transformation plan. This plan is shaped by the organization’s goals and its urgency for results. The level of ambition in terms of cost savings and the timeline for achieving them depend on several factors:
- The urgency of transformation, driven by the company’s economic situation and competitive pressures
- The company’s ability and willingness to implement changes rapidly
- The gap between the current organizational setup and the desired future state
Optimize
The transformation plan is structured with short-, medium-, and long-term actions, each yielding results over different timeframes:
- Short Term: Quick wins that provide immediate cost savings
- Medium Term: More significant changes that require a moderate level of restructuring
- Long Term: Strategic initiatives that result in sustainable cost reductions over time
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