Harnessing the Expenses Burden
through Efficient Cost Management
Strategies
(How can I reduce costs
continuously?)continuo...
Agenda
• Introduction
• Loss Elimination as a Culture
• Preparation
• Analysis
• Execution & Tracking
• Some examples
2
Victor Guevara
Group Finance Manager
Procter & Gamble
Australia/New Zealand
Positions Held & Dates
2002 Tax & Treasury Ana...
About Procter & Gamble
• Founded: 1837 Market Cap: 212 Bn (USD)
• Employees: 121,000 Revenue: 84 Bn (USD)
• Operations: 70...
Loss Elimination as a Culture
• Establish need
• Establish target
• Analyse
• Execute
• Track
• Start again
5
Why do we need to cut costs?
Loss elimination exercises cannot be seen as simply a
finance project, otherwise it won’t be ...
Benchmarking
Benchmarking is the solid basis behind which we can set the
right targets and glidepath
Without a solid basis...
Now what do we do?
“Wow, that’s clearly a stretching target. What
are we going to do now?”
“That looks impossible. No way ...
Current State
Current
Loss
Opportunity
Total Loss
Opportunity
Define the lossesDefine the losses
All losses above the idea...
Brainstorming phase
Define the scope
Define the teams / themes
Define the ideal state for each area
Begin loss data collec...
Decision phase
From the list of ideas, risk adjust and rank losses
Decide which projects to execute
Assign project owners,...
Example of Pareto principle
120
140
160
180
200
$LossEliminationperproject
1,000
1,200
1,400
1,600
1,800
Cumulative$LossEl...
Tracking example
13
What happens if a project
becomes off track
Fix it – understand the root cause
Adjust – CPS may have been too aggressive
M...
What Why?
Why?Why?
Why-Why-Why
Instruction:
Use Why-Why-Why analysis to identify underlying causes to your problems.
Key
B...
Renewal
Remember – Loss elimination is a culture
Once the key projects are on track and some have been
delivered, we need ...
Final Thoughts
Loss Elimination must be part of daily culture
It starts with a strong rationale, benchmarking
and portfoli...
Any final questions?
Victor Guevara
Group Finance Manager
18
Group Finance Manager
Procter & Gamble
guevara.v.1@pg.com
au....
Upcoming SlideShare
Loading in …5
×

Harnessing the Expenses Burden through Efficient Cost Management Strategies by Victor Guevara, Group Finance Manager, Procter & Gamble

574 views
422 views

Published on

Harnessing the Expenses Burden through Efficient Cost Management Strategies by Victor Guevara, Group Finance Manager, Procter & Gamble

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
574
On SlideShare
0
From Embeds
0
Number of Embeds
11
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Harnessing the Expenses Burden through Efficient Cost Management Strategies by Victor Guevara, Group Finance Manager, Procter & Gamble

  1. 1. Harnessing the Expenses Burden through Efficient Cost Management Strategies (How can I reduce costs continuously?)continuously?) 1 Victor Guevara Group Finance Manager Procter & Gamble guevara.v.1@pg.com au.linkedin.com/in/victorguevara/ These are the personal views of Victor Guevara and not of his employer
  2. 2. Agenda • Introduction • Loss Elimination as a Culture • Preparation • Analysis • Execution & Tracking • Some examples 2
  3. 3. Victor Guevara Group Finance Manager Procter & Gamble Australia/New Zealand Positions Held & Dates 2002 Tax & Treasury Analyst, Australia & NZ 2003 Financial Analyst, Customer Business Development, Aust & NZ 2004 Competitive Intelligence Leader, Australasia, ASEAN, India Education University of Sydney, B. Commerce – Accounting, B. 2004 Competitive Intelligence Leader, Australasia, ASEAN, India 2005 Senior Financial Analyst, Skincare, Australasia, ASEAN, India 2006 Plant Finance Manager, Somersby & Scoresby Sites, Australia 2008 Group Finance Manager, Market Operations, Aust & NZ 2010 Group Manager, Corporate Finance and Innovation Diamond Leader, Australia 2012 Group Finance Manager, Customer Business Development, Australia & NZ 3 Accounting, B. Chemical Engineering (Hons), 1997-2001 CPA (Australia) External Interests Captain, Australian Army (Active Reserve) MBTI: INTJ
  4. 4. About Procter & Gamble • Founded: 1837 Market Cap: 212 Bn (USD) • Employees: 121,000 Revenue: 84 Bn (USD) • Operations: 70 countries Brands: ~300 4
  5. 5. Loss Elimination as a Culture • Establish need • Establish target • Analyse • Execute • Track • Start again 5
  6. 6. Why do we need to cut costs? Loss elimination exercises cannot be seen as simply a finance project, otherwise it won’t be taken seriously In order to engage the organisation to cut costs, there needs to be a clearly articulated rationaleneeds to be a clearly articulated rationale The tone from the top needs to be positive Without this, the program can never be brought to life 6
  7. 7. Benchmarking Benchmarking is the solid basis behind which we can set the right targets and glidepath Without a solid basis, teams will not be (as) engaged to deliver a random target Benchmarking can be internal and/or external Benchmarking should involve financial and non-financial metrics 7
  8. 8. Now what do we do? “Wow, that’s clearly a stretching target. What are we going to do now?” “That looks impossible. No way in hell”“That looks impossible. No way in hell” How do we get started? How do we get organised? 8
  9. 9. Current State Current Loss Opportunity Total Loss Opportunity Define the lossesDefine the losses All losses above the ideal are recoverable, the only issue is when and how much. LOSSES 9 Ideal State (ex. Regulations) Future Loss Opportunity Zero State Future State Value added Ideal CostCost LOSSES
  10. 10. Brainstorming phase Define the scope Define the teams / themes Define the ideal state for each area Begin loss data collection 10
  11. 11. Decision phase From the list of ideas, risk adjust and rank losses Decide which projects to execute Assign project owners, timelines, targetsAssign project owners, timelines, targets Track execution Fix execution - if off-track 11
  12. 12. Example of Pareto principle 120 140 160 180 200 $LossEliminationperproject 1,000 1,200 1,400 1,600 1,800 Cumulative$LossElimination Supplier Q ualification M Q M /JO E 12 - 20 40 60 80 100 1 6 11 16 21 26 31 36 41 46 51 56 61 # of Projects $LossEliminationperproject - 200 400 600 800 1,000 Cumulative$LossElimination 75% of loss elim ination
  13. 13. Tracking example 13
  14. 14. What happens if a project becomes off track Fix it – understand the root cause Adjust – CPS may have been too aggressive Make choices to heavy up resourcing or investment to accelerate Ensure we risk adjust the portfolio 14
  15. 15. What Why? Why?Why? Why-Why-Why Instruction: Use Why-Why-Why analysis to identify underlying causes to your problems. Key Barrier (what is getting in our way from meeting the target listed above)
  16. 16. Renewal Remember – Loss elimination is a culture Once the key projects are on track and some have been delivered, we need to start expanding the loss portfolio We celebrate our progress, and move onto the next part of our journey The more we look, the more we find. The journey is continuous 16
  17. 17. Final Thoughts Loss Elimination must be part of daily culture It starts with a strong rationale, benchmarking and portfolio of ideas It requires strong tone from the top and support from all multi-functional team members It requires decisive choices, strong execution and tracking 17
  18. 18. Any final questions? Victor Guevara Group Finance Manager 18 Group Finance Manager Procter & Gamble guevara.v.1@pg.com au.linkedin.com/in/victorguevara/

×