Building materials manufacturer: Fixed cost reduction
Faced with stagnating revenues and declining profitability, a leading construction materials manufacturer wanted to significantly lower his fixed labor costs. Based on industry-specific external benchmarks amongst European companies as well as internal comparisons between units, Oliver Wyman was able to quickly isolate cost gaps and formulate specific objectives. After that measures to make processes more efficient and to realize synergies were defined in conjunction with the relevant management teams of each unit and functional area. As part of a comprehensive cost-reduction program, measures were then monitored according to stringent reporting standards with the help of a custom-tailored tracking tool. In the end, personnel costs within the sales, administration, and production areas were cut by almost 20% in less than one year.
