We all know a "penny pincher," those consumers out there who have a self-perception of being frugal or thrifty, while their friends see them as stingy or tight. To be fair, at one time or another, most have mimicked this behavior to save money. With the increasing cost of commodities, many companies are also looking for ways to cut their costs down and increase revenue. Consequently, cost-saving initiatives are at the top of many organizations’ tactical and strategic plans. Whether it’s the introduction of a new economical product or improving profit margins on an existing product to lower overall costs, companies are looking at creative ways to save on costs.
These initiatives require cross-functional collaboration and communication. Often, new product development and existing product improvements compete for the same resources. Both activities are forms of innovation and are instrumental to an organization revenue and margin growth. Instead of looking at these projects as two separate entities, a holistic approach is required for both to reach their optimal results.
With appropriate visibility and the proper tools, costs saving programs can be created and prioritized while new opportunities and gaps can be identified and remedied. As a result, corporate strategy and operational priorities can become in sync. When this happens, the magic begins. Companies start to see a reduction in their supply chain costs and organizational processes begin to improve because they are making better and smarter decisions. And smarter decisions lead to more successful products and profits, which both the consumers and the C-suite love.