SG&A Optimization

Reducing Sales, General and Administration costs (SG&A) has become a necessity with increasing pressure for margin improvements. Top-line growth is difficult to realize in this economic environment while the potential for reductions on direct costs is diminished by the need for thorough supply market analysis and contract negotiations. Companies are seeking ways to reduce SG&A spending.

A.T. Kearney clients are experiencing favorable impact from policy changes and process improvements that significantly benefit working capital and sometimes improve service levels and guarantee risk sharing.

More strategic choices may be difficult for companies to make, but have high potential benefits on SG&A levels. Decisions like the exit from competitively disadvantaged markets, the redefinition of support function roles or service models and the consolidation of real estate footprint may result in double-digit reductions in enterprise services.

A.T. Kearney can support clients in approaching SG&A restructuring with a solid focus on strategy definition and tangible improvements. The SG&A methodology is based on a series of key activities along four main phases:

• Baseline and sizing
• Opportunity identification and confirmation
• Prioritization and sequencing
• Implementation planning

During these phases, our consultants apply a change management program. Our clients receive a complete set of end products, from definition of strategic contribution by activity and overall improvement targets to implementation roadmap and service level measures.