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In today’s organizations, managers are required to do more with less. Everyone is looking for new ways to cut costs and increase value. A.T. Kearney is helping a growing number of companies take a new approach to cost reduction. Instead of focusing primarily on suppliers and prices, we are helping launch firmwide initiatives in “demand management” – a proven mechanism to take costs out of an organization without further reducing its capacity to execute.
This paper highlights the A.T. Kearney approach to demand management. The authors outline a comprehensive six-step methodology, which has been tested across numerous industries and spend categories. Using this approach, it is not uncommon for companies to cut 10 to 20 percent off their addressable spend in certain categories; savings that can begin in as little as three months.
With demand management, organizations address the underlying drivers of their external spend, align their purchases to their business needs, and eliminate unnecessary consumption. When executed properly, demand management fundamentally changes the way organizations acquire their goods and services.
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