Profitable Growth and Cost Optimisation

The better the question (The problem):

A global, diversified mining company was experiencing upward pressure on their cost base. Previous attempts at managing costs were not sustainable. Even after repeated cost outs, costs continued to grow, creating a “cost-out cycle”. The issue? Previous efforts delivered short-term benefits but failed to identify deeper organisational inefficiencies as the root cause of inflated operating costs.

The better the answer (How EY teams helped):

Knowing that cost optimisation is a continuous effort which requires structures, tools and processes, the EY team worked closely with the client to:

• Embed cost management processes and routines to improve planning, approvals and reviews
• Improve cost data to help enable actionable insights and better decision-making
• Increase commercial / finance team effectiveness by defining roles and responsibilities and uplifting people’s capability through structured training

The better the world works (The impact):

Investment in the development of internal cost management capabilities created a platform for continuous cost improvement, facilitating the client to escape the “cost-out cycle” and sustain reduced operating costs and improved profitability.

The better the question (the problem):

A leading global beverage manufacturer needed to improve profitability amid stagnant revenue growth. The challenge? Execute a multi-year cost transformation to streamline operations and boost financial performance.

The better the answer (how we helped):

EY teams engaged with the client to:

• Simplify their SKU portfolio, removing 75% of negative profit SKUs and reducing complexity by 35%.
• Conduct a cost-to-serve analysis to improve customer profitability and cut distribution costs.
• Review end-to-end supply chain processes to enhance efficiency and free up production capacity.

The better the world works (result/impact):

The program delivered a 35x ROI, freeing over 2,000 production hours, cutting logistics costs by 10%, and achieving a 5% uplift in gross profit—ensuring long-term, sustainable gains.

The better the question (the problem):

A large New Zealand insurance company faced challenges in its customer engagement centre operations. Despite revisiting its operating model and restructuring its operations, the company struggled with growth and operational efficiency, resulting in a savings gap of $10m. The company sought to reduce incoming call demand and increase the efficiency and effectiveness of its operations.

The better the answer (how we helped):

Working closely with the client, we conducted a six-week diagnostic assessment using our channel optimisation methodology. This involved developing a performance baseline, conducting direct observations through call listening, and analysing supplied data to establish key hypotheses for improvement. We identified high-impact improvement opportunities, estimated expected benefits, and outlined a high-level roadmap. The initiatives were scoped and categorised into strategic, priority, and quick wins to provide a clear pathway forward for implementation. 

The better the world works (result/impact):

Overall, 20 actionable initiatives were identified with an estimated benefit of $5m-$7m for the examined centre and potential benefit range of $8m-$13m when extrapolated across the wider  operations and brands.

Opportunity areas included:

• Reducing incoming call workload (with opportunities to eliminate up to 16% of customer contact demand by addressing upstream process failures and shifting up to 29% of 'avoidable value' calls to existing self-service functionality)
• Improving self-service functionality
• Enhancing consultant performance management and reporting
• Optimising forecasting and scheduling
• Aligning telephony, resource and learning strategies

This engagement didn’t just identify savings; it upskilled the client’s team and provided them with actionable steps to implement these initiatives and achieve the savings, positioning the business for sustainable, long-term success.

The better the question (the problem):

A large public sector organisation faced significant challenges. With escalating costs, a need for service improvements, and increasing complexities in meeting regulatory requirements, the organisation needed to optimise costs and enhance capabilities. The stakes were high, and the timeline was tight.

The better the answer (how we helped):

Over six months, EY teams engaged with the client through three phases of work to identify and confirm benefits across the organisation. Key focus areas included sourcing approaches, negotiation tactics, and continuous improvement.

 Our teams mobilised governance and program management protocols, developed a Group Spend Cube, performed a baseline capability assessment, and explored initiatives through workshops with client stakeholders. We prioritised initiatives based on expected benefits and ease of implementation and executed them using agreed tools and procedures.

The better the world works (result/impact):

This organisation achieved multi-million dollar savings across key areas, accelerating and doubling current year expectations to $70m+ while setting up for an additional $130m+ in the next financial year. The organisation identified supplier synergies and categories ideal for consolidation, using accessible spend analytics, benefits tracking, and dashboard tools. The complementary client teaming transferred knowledge, good practices, and pace, setting the government body up for success following the close of the engagement.

The better the question (the problem):

A leading multinational company faced challenges to reduce costs and improve service delivery in its back-office function.

The challenge? Transform shared services operations to become a provider of high-quality services delivered effectively and efficiently, maximising value for its shareholders. This would require navigating high levels of process variation, inefficient process handoffs, and high rework due to poor input quality.

The better the answer (how we helped):

Working closely with the company, we partnered on a data-driven approach to improve visibility of current operations and identify opportunities for increasing productivity. Our efforts focused on simplifying and standardising processes, reducing effort per task, and eliminating non-value-add activity. We supported the implementation of these opportunities and realising them through a process led future state organisation design. We also upskilled leadership on lean process improvement principles and active management.

The better the world works (result/impact):

The engagement led to significant capacity opportunities and process improvement initiatives, resulting in substantial annual gains:

• Order to Cash: Identified 18 FTE capacity (46% improvement) 
• Source to Pay: Identified 10.4 FTE capacity (20% improvement) 
• Hire to Retire: Identified 8.5 FTE capacity (20% improvement) 

Key themes for improvement included right-sizing teams, consolidating transactional activities, standardising processes, improving input quality, establishing process-based queues, leveraging existing system functionality and reducing manual data entry.

The future organisation design improved process flows across teams, reduced handoffs, and duplication, and realised the capacity created through process improvements. Ninety staff and leadership were upskilled on principles of lean process improvement and active management to sustain the change and continue operational excellence focus.   

This engagement ensured the company didn’t just identify savings—they realised them, embedding a continuous improvement mindset that would continue to improve operations and service quality.

The better the question (the problem):

A leading food and beverage manufacturer sought to explore potential opportunities within their business aimed at enhancing Net Operating Profit before Tax (NOPBT). While prior product price increases had positively impacted the NOPBT, there remained significant opportunities for cost optimisation and revenue enhancement that could further improve profitability.

The better the answer (how we helped):

Working closely with the client, we undertook a comprehensive review of the current business model, identifying pain points and strengths through the lenses of revenue and market, cost optimisation, and product profitability.

We developed and tested improvement opportunities, with each opportunity  sized for its impact on NOPBT, implementation, and change requirements, and consolidated into a strategic 5-year plan to realise the improvements. The project involved creating a "business on a page" model overview, a 5-year strategic plan, and a product profitability and contribution dashboard.

The better the world works (result/impact):

The engagement led to a $18m increase in NOPBT, $10m of which would be realised within  a 2-year timeframe year (2025). This was achieved through initiatives across:

• Revenue and Market: Enhanced revenue through market analysis and strategic pricing adjustments
• Cost Optimisation: Reduced costs by streamlining operations and eliminating inefficiencies
• Product Profitability: Enhanced product profitability through detailed analysis and optimisation of product lines

The future organisation design provided a holistic view of profitability, the factors influencing it, and potential improvement opportunities.

This engagement equipped the client leadership with a comprehensive strategic plan and tools to monitor and drive performance improvements, positioning the client to not only realise short- term savings but to also sustain and continue to drive improvements beyond the engagement timeline.