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Data & AI | Automotive | Cost Optimization

Cost-saving ideas reduce overhead costs at an international commercial vehicle manufacturer

As part of an ongoing Operational Excellence Program, an international commercial vehicle manufacturer faced a clear challenge: to develop viable cost-saving ideas on short notice in order to sustainably reduce overhead costs both in the company’s administrative departments and at selected production sites. Despite an already highly optimized cost base, numerous stakeholders involved, and a required payback period for the measures of less than one year, the timeframe—at just three months—remained extremely tight. Working closely with the client, KBC identified concrete cost-saving ideas within this short timeframe that would yield savings of over 20 million euros per year, without risking adverse effects elsewhere in the organization.

Cost-Saving Ideas in Numbers

Cost-Saving Measures
Reduction of Indirect Costs
Months
Project duration

The Customer

An international commercial vehicle manufacturer 

The client is one of the world’s leading manufacturers of commercial vehicles and had implemented a company-wide Operational Excellence program to safeguard and increase profitability. One of the initiatives within this program focused on the sustainable optimization of overhead costs—known as “indirect spend”—in the company’s administrative divisions as well as at selected production sites. It was crucial for the client to identify and formally agree upon new cost-saving ideas within just three months, with each measure having a payback period of less than one year. Complicating matters was the fact that this involved joining an already ongoing program with ambitious goals and a tight timeline, combined with an already highly optimized cost base and a large number of participating departments and stakeholders.

The Project

Cost-Saving Ideas Based on the KBC Method

Together with the client, KBC conducted targeted cost-saving discussions and workshops in both direct and indirect areas to identify new ideas for cost savings. 

Based on the KBC Indirect Spend Optimizer catalog—which includes more than 150 measures—and a data-driven analysis of volume drivers by cost category, the project team systematically identified potential cost-saving ideas for the plants and management functions. The most promising ideas were then evaluated, prioritized, and further refined financially in several steps to specifically increase their readiness for implementation. KBC supported the agreed-upon measures through to implementation and kept top management and the executive board continuously informed of the project’s progress. From the outset, the project team also involved the relevant budget and cost managers and ensured that the chosen approach was supported by all key stakeholders and management.

Portrait photo of Marc Perbix, Senior Partner at Kemény Boehme Consultants (KBC). A man with a shaved head and a short full beard, looking at the camera with a friendly and confident expression. He is wearing a deep blue suit over a light blue shirt without a tie, with both hands relaxed in his pants pockets.
Portrait photo of Marc Perbix, Senior Partner at Kemény Boehme Consultants (KBC). A man with a shaved head and a short full beard, looking at the camera with a friendly and confident expression. He is wearing a deep blue suit over a light blue shirt without a tie, with both hands relaxed in his pants pockets.

Here's how we view ideas for cost savings

Good ideas for cost savings don’t come from blanket benchmarks, but from a close look at the actual cost drivers. In this project, we worked with the client to systematically develop new ideas for cost savings, evaluate them, and see them through to implementation—all within just three months, despite an ongoing program and numerous stakeholders involved.

Marc Perbix, Senior Partner at KBC

The result

Over 20 million euros in annual savings through targeted cost-saving ideas

Within three months, the project team identified six specific cost-saving measures and approved them in collaboration with the client, resulting in total annual savings of over 20 million euros in administrative areas. In addition, the team identified various other cost-saving ideas at the production sites, such as in the areas of recourse, maintenance, and energy. By preparing the relevant implementation documents, KBC also sustainably increased the readiness of the agreed-upon measures for implementation. 

In total, more than 70 cost-saving ideas were detailed, discussed, and evaluated over the course of the project, enabling the client to achieve annual savings equivalent to 15% of its total indirect spend. The project’s success was based on a combination of data- and volume-driven analysis, the testing of proven levers for change, an experienced project team comprising strategy, finance, and functional experts, and the joint development, refinement, and communication of cost-saving ideas with the client. Despite a tight timeline of just three months and joining a program that was already underway, the team succeeded in developing and finalizing viable cost-saving ideas that measurably contributed to securing and increasing the client’s profitability.

A portrait of Marc Perbix, Senior Partner at Kemény Boehme Consultants, smiling at the camera with both hands in his pants pockets.
A portrait of Marc Perbix, Senior Partner at Kemény Boehme Consultants, smiling at the camera with both hands in his pants pockets.
Marc Perbix
Senior Partner

Facing a similar challenge? Talk to us

Whether you’re looking for new ideas on cost savings, indirect spend optimization, or support in the area of operational excellence: In a brief discussion, we’ll determine which steps make sense and how KBC— an international boutique consulting firm based in Munich —can help you move forward. 

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