Background and Challenge
An approximately $3.6 billion large listed freight operator was under cost pressure and faced a changing competitive market.
The client sought L.E.K.’s support to transform its operating model to allow it to capture growth opportunities and reduce its cost base in order to become cost-competitive.
Approach and Recommendations
Create an end-to-end cost-out program, from target setting through delivery, with a focus on building capabilities within the client to ensure sustainable results. Our work included:
- Applying insights from international freight operators, other comparable industries and the freight market to develop a number of operating model options
- Working with the client’s senior management team to identify and size potential efficiency savings
Results
- A new operating model was identified and an implementation plan developed to guide the client during the transition process
- The client adopted the recommended operating model and committed to implementing the efficiency opportunities, which represented approximately 10% of its cost base
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