At a Glance
- Focus on Key Cost Levers: Optimize labor productivity, renegotiate contractor terms, and streamline procurement to drive significant cost savings.
- Leverage Technology: Re-engineer, simplify and optimise work processes before implementing process automation. Apply best-fit digital solutions to reduce operational inefficiencies and enhance agility.
- Maximize SG&A Efficiency: Rationalize roles and optimize headcount to ensure support functions are lean and aligned with strategic goals.
Introduction
This article is the first in a six-part series titled “Thrive Through Turbulence,” focusing on how businesses can optimize their operations during these challenging times.
Businesses now face of unprecedented global disruptions, from economic instability to changing market dynamics. Inflation, rising energy prices, tariffs and shifting supply chain patterns are challenging business operations, and optimizing costs has never been more crucial.
One strategic priority to action immediately is Cost Optimization. However, the key to weathering these turbulent times lies not just in cutting costs, but in doing so without sacrificing the core capabilities that drive long-term success.
Below are five key actions business leaders can start taking today to achieve cost optimization across their organizations.
1. Optimize Direct Labour Productivity and Refine Manning Models
In many industries, labor costs represent the largest portion of operational expenditure. To optimize these costs, businesses can often improve direct labor productivity through smart manning models. Reassess the number of employees required for specific tasks and ensure that resources are allocated in the most efficient way possible.
What you can do:
- Workforce Scheduling: Using advanced tools to optimize shift scheduling and reduce idle time to increase labor productivity.
- Cross-Training: Train employees across multiple roles to become more adaptable, leading to a leaner workforce that can respond to fluctuations in demand.
- Performance Management: Strengthen performance metrics and incentivize high performance to drive individual productivity.
What it unlocks:
By aligning labor costs with demand, businesses can reduce overstaffing during slower periods while maintaining flexibility. The result is a more agile workforce, lower labor costs, and improved overall efficiency without reducing employee morale.
Example:
A Chinese Pharmaceutical manufacturer faced low supplier delivery timeliness (65%). By implementing a new Management Control System (MCS) with transparent production planning and reporting tools, staff training and developing resource planning and project management tools, they achieved a significant improvement in supplier delivery timeliness from 65% to 99%. Read the case study.
2. Stop Wasting Contractor Potential — Fix the Way You Manage Them
Just because the work is outsourced doesn’t mean it’s efficient. In many cases, contractors aren’t the problem — the client is.
Delays with permits, limited site access, missing tools, unclear scopes — these all leave contractors sitting idle. That downtime becomes your cost. You end up overpaying for work that could have been completed faster, cheaper, and better.
Fixing this isn’t just about cost-cutting — it’s about enabling contractors to deliver the value you’re already paying for.
What You Can Do:
- Fix the Facilitation: Contractors can’t be productive if your team is slow to issue permits, coordinate materials, or grant access. Streamlining internal coordination unlocks external productivity.
- Tighten Scope Control: Vague deliverables or shifting targets are a recipe for scope creep and cost blowouts. Be specific. Lock the scope. Track against it.
- Build in Accountability: Renegotiate contracts to include not just better pricing, but performance-based incentives and penalties. Reward timely, high-quality delivery — and hold partners accountable when they fall short.
- Coordinate Daily: Set up structured daily or weekly check-ins to align expectations, remove blockers, and keep timelines on track.
What It Unlocks:
You get more value from the contractors you already have — without changing vendors.
Costs drop. Delays shrink. Quality improves. And you strengthen working relationships by creating a setup where both sides win.
Example:
A utilities client was losing thousands each week as contractors sat idle — waiting on permits or tools the client failed to provide. By fixing internal facilitation and introducing joint planning and performance-linked contracts, we lifted contractor productivity by over 10% and on-time deliveries by 250%, with no change in suppliers. Read this case study.
3. Stop Spreading Your Spend — Consolidate Vendors to Cut Waste
Too many vendors doing too little volume each leads to higher costs, more admin, and weaker negotiating power. Fragmented procurement is a hidden drain — and in turbulent times, it’s a luxury you can’t afford.
Consolidating vendors doesn’t just reduce unit costs — it simplifies operations, improves service levels, and gives you control.
What You Can Do:
- Cut the Vendor List: Streamline suppliers in each category. Centralising spend allows you to negotiate better pricing, improve consistency, and reduce contract management workload.
- Source Smarter and Closer: Look for suppliers located near your production or distribution hubs to shrink transport costs, reduce lead times, and improve reliability.
- Shine a Light on Spend: Use real-time spend analysis to identify fragmentation, highlight duplicated categories, and spot opportunities for consolidation.
What It Unlocks:
You’ll see immediate cost savings — but more importantly, you build a supply base that’s easier to manage and more resilient under pressure.
Better deals, fewer delays, stronger partnerships — and a procurement function that can focus on strategy, not firefighting.
Example:
A leading telecommunications provider in Asia, faced rising costs due to a fragmented procurement system. Renoir identified inefficiencies in vendor management and procurement processes, which lacked strategic insight and forecasting capabilities. By rationalising vendors and refining procurement practices, the company achieved a 23% cost reduction and 47% fewer vendors. These improvements strengthened the company’s ability to manage costs and enhance procurement efficiency in a competitive market. Read this case study.
4. Automate the Busywork — Simplify Workflows to Free Up Capacity
Every business has it: manual tasks, clunky processes, and bloated workflows that waste time and drag down productivity. If you’re still relying on people to push paper, chase approvals, or update spreadsheets — you’re leaving money on the table.
Automation isn’t just about saving headcount. It’s about speed, accuracy, and freeing your teams to focus on work that moves the business forward.
What You Can Do:
Identify digital solutions that will bring a quantifiable benefit to the organization based on their business needs and maturity. I would remove the cloud/ERP angle and re-do this paragraph.
Re-engineer, simplify and optimise work processes before implementing process automation, and best-fit digital solutions to reduce operational inefficiencies and enhance agility.
- Identify opportunities for digital solutions: Identify areas in your business that benefit from digitisation and automation. Make sure they will bring a quantifiable benefit to your organization based on business needs and maturity.
- Simplify work processes: Identify process bottlenecks — approvals, handoffs, duplications — and redesign workflows to move faster with fewer steps and less friction. Keep a holistic view across departments for like opportunities and where departments connect. Communicate your initiatives early and often across departments.
- Select Best-Fit Digital Solutions: Select specific solutions that drive the business outcomes you need. Adopt these best-fit solutions to ensure your organisation stays closely aligned to its goals, rather than being led by market trends or external vendor recommendations. Make sure to engage IT and vendors early in the project.
What It Unlocks:
Less rework. Faster decisions. Lower cost per transaction.
You build a leaner, more responsive organisation — one that scales without adding complexity or overhead.
Example:
A leading global life insurance provider faced inefficiencies due to a lack of Standard Operating Procedures (SOPs) and limited process automation. Renoir mapped key agency functions, identifying areas for improvement, including duplicated efforts across teams. New SOPs were implemented, and 37 major processes were automated. This initiative led to a 31% productivity increase in middle and back-office operations, improved resource capacity, and a new working culture where teams could effectively plan and problem-solve to meet targets. Read this case study.
5. Trim the fat — Make SG&A Lean, Focused, and Strategic
Support functions are essential — but they’re also a major cost centre. Over time, they tend to grow without scrutiny: duplicated roles, outdated tasks, and headcount that’s no longer aligned to strategy.
Optimising SG&A isn’t about cutting for the sake of it — it’s about making sure every role adds value, and every task serves the business.
What You Can Do:
- Rationalise the Roles: Map out SG&A responsibilities and challenge the status quo. Look for roles that can be automated, consolidated, or sunset without impacting performance.
- Reallocate Smartly: Identify underused capacity and shift resources to where they’re needed most — whether that’s frontline enablement, digital projects, or transformation efforts.
- Outsource the Non-Core: Offload functions like payroll, IT helpdesk, or admin support to specialist providers. Free up internal bandwidth to focus on what really matters.
What It Unlocks:
You reduce overhead without losing momentum. Your SG&A becomes leaner, faster, and better aligned to business priorities — supporting growth rather than slowing it down.
Example:
A leading Asian pharmaceutical company wanted to optimise manpower and reduce costs across the business. Key actions included validating the existing organisational structure, assessing unique roles, and conducting detailed observation studies. Renoir identified a 11% manpower cost optimisation opportunity and a 9% reduction in manpower headcount. Read this case study.
Conclusion: Cut Smarter, Emerge Stronger
Turbulent times demand action — but not just any action. The difference between surviving and thriving lies in how you cut costs: strategically, surgically, and without damaging the capabilities that power future growth.
From labour models to contractor performance, procurement simplification to automation, and leaner SG&A — the five strategies outlined here offer a practical roadmap for driving efficiency without compromise.
Do it right, and you don’t just weather the storm — you come out of it faster, sharper, and better positioned to grow.
Renoir Consulting has helped businesses around the world unlock cost savings without losing capability for over 30 years.
Let’s work together to build a quantified opportunity heatmap, prioritised initiatives, and a roadmap that gets results — fast
