Whitepaper: The £10 billion profit opportunity

The £10 billion profit opportunity

Fast facts from research

  • Supplier costs outstrip labour in the FTSE-350 by 5 times

  • 1% reduction in supplier costs can increase EBITDA by 3.6%.  The same reduction in labour costs only boosts EBITDA by 0.8%

  • Improved cost cutting strategies offer an untapped, alternative opportunity to reassure shareholders via managing the bottom line as opposed to just growing the top line

How innovative supply chain management strategies can help reduce costs and drive cost savings to the bottom-line.

 

Businesses are looking for innovative ways of managing costs, as the tried and tested methods of cutting business costs, such as headcount reductions, no longer return the same value they once did.

The report analyses the financial reports from FTSE 350 companies between 2008 and 2011. It reveals that businesses spend, on average, two-thirds of their revenue on non-labour costs, 68.3% in 2011.

This far outstrips their collective labour costs, which averaged just 12.9% of their revenue. Yet headcount reduction is traditionally seen as the quickest and easiest strategy for cost reduction.

This raises a number of questions:


  • Are businesses ensuring that their non-labour cost base is being effectively managed and that the cost is being contained?

  • If not, why not?

  • And what are the potential benefits of making that investment?


This report outlines a huge opportunity for business leaders to improve their company’s profitability by taking a different approach to cost management.

   

Access it here