Multinational Cosmetics Manufacturer saves $13.3M Annually through Cost Cutting and Restructuring

A multinational manufacturer of cosmetics, skincare, fragrances, and personal care products.

$13.3M

annualized savings

$2.0M

saved through contract renegotiation

Challenge

Our client’s expenses were rising rapidly, despite a consistent decrease in revenue from their manufacturing operations. The procurement department was understaffed and unable to handle the demand for new vendors.

These financial and operational problems were impacting product quality and customer retention.

Discovery

Our team completed a rapid analysis of over $250M in expenditures to identify opportunities for performance improvement through cost reduction and process workflow restructuring. Our team also negotiated with vendors on behalf of the procurement department due to high turnover in this department. We supported critical operations through the turmoil and implemented long-term improvement opportunities including:

Increasing expenditure visibility by implementing a new expense analytics platform, SOP’s, and training
Reducing procurement costs by renegotiating contracts in Small Parcel, Air Freight, Pallets, Uniforms,
Decreasing overall expenses by developing a new CapEx policy based on industry best practices and revenue levels
Supporting business continuity by onboarding senior new hires during a period of instability and high turnover