Closing the gap and regaining a competitive advantage
The Challenge
A major aerospace and defense firm was facing increased market pressure with their product costs running 25 to 30 percent higher than their competition.
Despite being renowned as leading technological experts, they were slowly losing ground in some markets. Following a succession of lost tenders, the firm decided to completely rethink their strategic vision. This included a competitive gap analysis, redefining their key priorities, simplifying their structure, and embarking on a series of bold cost transformation initiatives.
Our Breakthrough
Competitors were rapidly outpacing this firm. If they were to survive, they would need to set themselves ambitious and sustainable cost reduction targets between 25 to 30 percent.
Over a two-year period, we partnered with the firm to tailor a cost transformation project. This would not only to safeguard their existing initiatives but also use the disruptive climate to regain their competitive advantage long-term, and importantly, lead the market once more.
We designed a comprehensive transformation to re-invent their business across three pillars:
- Invest in the future to grow the business
- Decrease costs to regain competitiveness
- Reinforce commitment on the quality of products
The transformation plan covered 5 key areas: engineering efficiency; manufacturing efficiency; procurement performance: equipment sourcing; structure cost reduction; and product policy.
Our Impact
Oliver Wyman collaborated with teams across the firm to help them embed new processes and actions, ensuing that they were meeting progress milestones.
As a result, the client managed to successfully implement not only their initial cost transformation objectives, but also achieve an additional 25 percent cost reduction through a series of more ambitious and more disruptive initiatives.
