Nexview Consulting - S&OP Consulting

  • About
    • Leadership
    • Vision, Mission, Values
    • Why Nexview?
  • Services
    • Overview
    • S&OP and Supply Chain Management
    • S&OP Readiness Assessment
    • S&OP Coaching
    • Training Courses
      • Training Overview
      • S&OP
      • Demand Planning
      • Combined Demand Planning and S&OP
      • Interactive Workshop SE Asia
      • Integrated Business Planning for Oil & Gas
    • Integ Bus Plng for Upstream Oil&Gas
    • S&OP for Upstream Supply Chains
    • Railcar Fleet Mgmt
    • Profit Optimization
    • Virtual Consultant
    • Nexview Online
  • Work
    • Approach
    • Clients & Industries
    • Case Studies
    • Operations Assessment
    • Change Implementation
  • Events
    • Next Public Course – Virtual S&OP
    • Executive Workshop
    • Conferences
  • Benchmarks
    • Key Topics in S&OP
    • Getting Sales Support for Demand Planning
    • Portfolio Review
    • How World Events Are Changing Supply Chains
  • Careers
  • Nexview Online
    • Clients login
    • Members
      • Login
      • Logout
      • My bookmarks
      • Update info
      • Member content archive
      • Bronze
    • Take a look/Join
    • Content archive
    • Blog
      • Sales & Operations Planning
      • Supply Chain Improvement
      • Supply Chain Results
      • Operations Assessment
      • Change Management
      • Organizational Effectiveness
    • Supply Chain Assessment Toolkits
      • Overview
      • S&OP
      • Demand Planning
      • Supply Planning
      • Procurement
      • IBP Upstream Oil & Gas
    • All eBooks
  • Contact

Are Avoidance Savings Real?

moneyjudge

 

I’ve had the opportunity to have this discussion with many CFOs, Controllers, and Procurement Leaders, over the years delivering savings in procurement.  While some people may gravitate to the pure, tangible, bottom line savings, the avoidance savings are real.  They are real because the world and business conditions are constantly changing and change must factor into the baselines by which we measure results against.  If savings teams didn’t take action and didn’t provide their expertise to avoid cost increases, costs very well would have gone in the wrong direction.

Company leaders I’ve worked with generally see this, and to date (knock on wood) I’ve always been able to get teams recognized for their contributions in avoidance savings.  The sticking points can sometimes occur if cost increases were not budgeted previously and financial leaders are trying to measure savings against a static budget, it can get a little political.  It’s important that savings be measured against what has really historically happened adjusted for the dynamics and complexities of business that are beyond the control of any one company or the people in it.  This concept is especially important to apply when dealing with volatile commodities (e.g. petroleum products, chemicals, base materials).  Sometimes the indexing by which baseline costs are adjusted is not perfect, but as with many things in business, you make the best decisions with the data and experience you have, and go with the number.   

 

You may also like

  • Improving the Supply Chain “Front End” – Supply Chain New Year’s Resolutions, Part 1 of 3Improving the Supply Chain “Front End” – Supply Chain New Year’s Resolutions, Part 1 of 3
  • Improving Your Forecast AccuracyImproving Your Forecast Accuracy
  • Why Your S&OP Initiative is on the Back BurnerWhy Your S&OP Initiative is on the Back Burner
  • Squeeze the “Lead Time Squeeze” Before it Squeezes Your BusinessSqueeze the “Lead Time Squeeze” Before it Squeezes Your Business
  • Considerations When Rationalizing Your Product PortfolioConsiderations When Rationalizing Your Product Portfolio
Share

Filed Under: Supply Chain Results

Tweets by @nexviewconsultg

Book – S&OP Results Tips, Traps, & Tools

Free eBook – Our Implementation Methodology

Featured Articles

  • "10 Tips for S&OP Sponsors" - APICS Magazine
  • Journal of Business Forecasting
  • Supply Chain Quarterly
  • Nexview Whitepaper
  • Journal of Trading Partner Practices
  • Nexview Overview Video
  • Nexview Online – Content Archive
  • Ideas – Blog Posts
  • Clients & Case Studies
  • IBP for Upstream Oil & Gas
  • S&OP and Supply Chain Training
  • S&OP Self Assessment Toolkit
  • Company Overview Flyer
  • Values
Share
  • Terms & Conditions
  • Privacy Policy
  • Contact Us
follow us on LinkeIn
follow us on twitter


Copyright © 2023 · Nexview Consulting, LLC ®

X

Forgot Password?

Join Us

Password Reset
Please enter your e-mail address. You will receive a new password via e-mail.