Case Study

A fast-growing production company got its SG&A expenses back on track after an over-proportional increase

A fast-growing production company got its SG&A expenses back on track after an over-proportional increase

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A fast-growing production company got its SG&A expenses back on track after an over-proportional increase Challenge Over-proportional increase of indirect SG&A Wide product diversity, global orientation, acquisitions and high growth rates led to an over-proportional increase in complexity in indirect SG&A costs that were far from production-group functions (indirect SG&A such as HR, finance, marketing and innovation). As a result, the costs of indirect SG&A increased annually by more than 5%, reflecting an increase of more than 25% compared to the development of the margin (around 5% per year). This development was a warning signal for management to launch a short-term optimization program that would aim to reduce 15% of global indirect costs in the next two years and increase costs by at

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