Background and Challenge
An agricultural storage system manufacturer in Brazil hired L.E.K. to identify cost reduction opportunities to maintain profitability in the new market scenario.
Approach and Recommendations
First, a high-level cost analysis of each of the client’s areas was conducted and used as a guide for interviews with employees, to assess possible cost reduction opportunities.
The cost reduction opportunities identified during interviews were separated into two categories:
- Short-term initiatives, involving adjustments in the company structure to address the new market scenario
- Medium-/long-term process improvements, involving changes in sales, production and installation processes
We estimated the cost reduction of each initiative, and concluded by creating/revising existing implementation plans.
We helped the client identify short-term and long-term cost reduction opportunities of R$20-30 million and approximately R$80 million, respectively.