The CFO of a leading US food manufacturer is asking employees to present ideas for cost savings to help their organization continue to be successful and profitable. Employees can approach this request in various ways and their answer can show their strategic thinking and speak to their level of commitment to the company and their future career.

There are employees that may present ideas that are directly related to their department. This suggestion is valuable and can result in cost savings however it may not be considering all aspects of the organization. Employees utilizing this approach may find that is easier to provide a limited suggestion because they may not feel like they have the expertise in all facets of the company to identify areas of opportunity, they may have limited time to dedicate to providing ideas, or visibility may be limited into the supply chain to suggest solutions that would impact the bottom line. There will be other employees that will spend their time developing suggestions by looking for overall process improvements in the company's supply chain, identifying suppliers and contract relationships that have not been evaluated in some time, and developing actions on implementing solutions that would benefit the company.

A possible suggestion may be based on one aspect of the company, their raw materials. This company's raw materials include agricultural products that are produced at company owned facilities in California. Due to the impact of the current drought, you could evaluate the agricultural products grown in California and the impact of the drought on the company’s input supply and costs. California is a main source of food supply for the US and the restricted water supply hinders production impacting all of us. This company has production facilities outside of California and may consider shifting production and developing a diversification plan to grow a variety of products necessary for their finished goods at a facility. This may include investigating other growing methods to alleviate potential supply shortfalls or expanding their production facilities to outside farms that can produce their products. While this potential opportunity does have an overall impact to the supply chain it will most likely require a significant amount of upfront work to research and develop an action plan. Implementation of shifting production will also require significant planning to avoid any gaps in production.

Another employee suggestion may be a more comprehensive approach and requires a clear action plan to gain buy in from the CFO. This suggestion is to have an outside party evaluate the entire organization by reviewing spend categories, supplier contracts, and processes to identify areas of opportunity. In addition, having a third party conduct this analysis and benchmark the company's information provides a path for establishing an action plan on how to tackle savings opportunities and process improvements. The assessment provides a clear case for the CFO to determine next steps to implement sourcing events, supplier negotiations, or scope improvements across multiple categories and departments in the company. An overarching suggestion that shows you can apply resources and experts where you need them to show your value to the CFO and the organization.
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Lindsey D.

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