For companies looking to start trying to save costs, Boston Consulting Group (BCG) has shared what it has seen when working with operations leaders across sectors. It has outlined five areas which should be central to any operation:
1. Align cost initiatives with business growth strategy
Effective cost management begins with understanding your company’s overall growth trajectory. Organisations facing market headwinds may need to focus on consolidating operations, streamlining distribution networks and implementing rapid cost-reduction measures to stabilise their financial position.In contrast, companies in growth phases should view cost optimisation as an opportunity to reallocate resources toward innovation and expansion. Our recent executive survey found that approximately two-thirds of business leaders prioritise reinvesting cost savings into growth initiatives.
2. Build transparent cost models for better decision-making
You can’t improve what you can’t measure. Leading organisations develop detailed, dynamic cost models that quantify expenses across specific supply chain processes. These models provide greater visibility into current costs, more effective performance monitoring and the ability to simulate different scenarios.Creating such models requires aggregating data from throughout the supply chain and maintaining real-time connections to operational systems. While this presents data management challenges, the insights gained are invaluable for identifying cost-reduction opportunities.
3. Embed cost consciousness in company culture
Sustainable cost optimisation isn’t a one-time event but a continuous discipline. Organisations that treat cost management as a temporary initiative typically see expenses creep back over time. By contrast, companies that successfully embed cost awareness into their culture achieve up to 11% greater long-term cost reduction.
Building this culture requires making a clear case for change that connects cost savings to organisational success. It demands consistent communication through multiple channels, well-defined metrics and KPIs that make performance visible at all levels and leadership commitment to sustaining the focus on efficiency.
4. Design for agility and resilience
As business environments become increasingly unpredictable, supply chains must be designed for adaptability. This requires balancing efficiency with the ability to respond quickly to disruptions. In the short term, companies need robust crisis response capabilities, including dynamic modeling to support rapid decision-making, simulation capabilities to anticipate disruption impacts and strategic redundancies through dual sourcing and buffer inventories.
For longer-term resilience, organisations should consider comprehensive scenario planning to mitigate geopolitical risks, near-shoring and regional partnerships to reduce dependence on vulnerable global routes and strategies to address export challenges and margin pressures in key markets.
5. Leverage AI and analytics to transform operations
Organisations implementing AI in supply chains typically see a 10-20% reduction in manufacturing, warehousing and distribution costs.
Supply chains represent the majority of operating costs for many businesses, making them a natural focus for optimisation efforts. By implementing these five strategies, companies can build more intelligent and responsive supply networks that not only reduce expenses but also create competitive advantage through enhanced resilience and agility.
Transportation & Logistics Software 