TURN AROUND AND COST MANAGEMENT

SAVING COST REQUIRES KNOWING THEM

The pharmaceutical environment is changing. Globally, politicians face the need of saving money in their health care system. As a consequence, an increased attempt for companies to better control cost.

Such overall cost optimization processes are aiming to adapt the manufacturers businesses to the changing market situation. Therefore, performance and cost management occurs in every optimization step of all success levers as an overall aim to keep in mind. However, the approach of cost and performance management is complex and shall be understood as a separate success lever as well. Looking at cost saving potential, the four major business functions are Research & Development, Production, Marketing and Sales, and Overhead functions like administration. Within these functions four cost categories offer the main cost saving potential. According to our experience, the cost saving potential can range from 5 to 50 percent depending on the category and department specifics.

But besides pure cost savings identified, the core elements of strategic repositioning need to be aligned with the overall organization. Therefore, it is important to set up an organizational framework and to align each organizational change with it.

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