Community Forum – What cost-saving initiatives have you instituted?

A: What cost-saving initiatives have you instituted?

Please find below the responses to this week’s IRI Community Forum Survey. Thank you to those who took the time to add their input! 

From the IRI member posing the survey: With inflation continuing to pose challenges, many companies are focusing on cost-saving initiatives. We’re looking to engage the IRI community to gather best practices on this front. Even though every organization has its own approach, there may be shared strategies or frameworks that could be leveraged by others to enhance their efforts. 

Responses are below.

Community Responses

What cost-saving initiatives has your R&D team implemented in response to inflationary pressures? 

• replace overengineered raw materials to standard quality raw materials with strict quality control 

• We have implemented alternate materials, and alternate designs that limit inputs. We have also focused on vertical integration. 

• more selective in funding, headcount optimization  

• Our cost-savings activities have been in place for several years and are not in response to recent inflationary pressures. 

• No cost savings measures specifically in response to inflation. 

• Supply chain and ingredient optimization. 

• Reduction of waste and waste costs which include process efficiencies, yield improvement, and waste reuse/valorization.

How does your organization measure the success of cost-saving initiatives in R&D?

• cost-savings will be calculated based on raw material substitution or process optimization
• Financial comparisons based on TPC over the fiscal year. There is also an inflation factor when considering prior years TPC’s versus current factory product.
• Keep within total number at end of the year
• Reduction in either RM cost, labor cost or equipment OEE.
• implemented solutions and performance measures
• We use a number of factors such as reduction in raw material or product/production costs, reduction in waste costs, revenue increase for valorized products reusing waste or subprime materials.

Comment (Optional)

• mainly with procurement
• Always working cross functionally, every day on every project.
• shifting workstatement allows teams to streamline and focus on the core function

What challenges has your team faced when implementing cost-saving measures, and how have you addressed them?

• even with strict quality control of new cost effective alternative raws, 3 out of 100 customers may face some issue during storage or processing.
• Timing: We have focused on project management and our project tracking tools to accelerate when possible.
• challenged with no headcount expansion, have been working to use AI and other tools to be more efficient
• Optimize materials without affecting the quality of the product. In some cases, we will assess usability / acceptability with customers prior to launching a less expensive option.
• There is risk involved in making changes to process or products, so while cost savings is a target there is apprehension due to collateral impacts.  Focus teams committed to understanding and mitigating risks help to derisk changes.
• Justifying capitol costs to handle a waste stream differently, i.e. instead of just throwing in a dumpster.