Few of them would be
- Leverage scale with reduced number of strategic suppliers across total spend .
- Expand global sourcing and low-cost country sourcing .
- Simplify material and product specifications while maintaining quality .
- Re-engineer processes to reduce inventory
CPO Ms Julia Brown gave details to the reporter s on cost reduction initiatives taken by Kraft Food Inc . She told that every spend category would be reviewed and supplier base consolidated . More of the items would be bought for the manufacturing through central buying team rather local buying .
Other cost reduction initiatives are
- Reducing its cash conversion cycle from 46 days in 2008 to 41 days by 2011 .
- Reducing overhead as a percentage of net revenue from 14% in 2008 to 12.5% in 2011 .
- Focus on category value chains, manufacturing platforms .
- Remove bottlenecks .
- Reduce waste .
- Optimize labor .
- Streamline inventory .
- Cover more than 30 category value chains across geographies over next two years
