Founded in Chicago in 1849 to care for children left homeless by the cholera epidemic. As the oldest existing child welfare agency in Illinois, CCCS has a rich history and successful record of meeting the profound and changing needs of children.
An active Board member of CCCS, who was familiar with National Cost Reduction Corporation’s services, referred NCRC to the acting and newly appointed Executive Director. She was very receptive to learning about expense reduction, improving their cash flow and increasing the bottom line or redirecting cost reduction management to programs that would enhance their mission in the community. Her biggest concern was committing her staff’s time to execute these savings, along with splitting the work among a number of managers who were already committed to providing early childhood education programs, teen parenting support and educational mentoring and family support programs. How could CCCS benefit from expense reductions and not divert the focus of their skilled staff?
National Cost Reduction Corporation Approach
NCRC had the opportunity to meet with senior managers and reviewed the process, timeline and the annual time required of CCCS approximately 12 to 15 hours in the year. The minimum amount of time demand on the CCCS staff was seen as a big benefit to them. The expense worksheet was mutually completed (45 minutes) and included annual expenses by category, supplier and annual spend.
NCRC analyzed the above matrix, called suppliers and returned to present a forecast of cost savings to CCCS. The timeline and the four documents were reviewed. Two documents need approval. The other two (Letter of Agreement and Letter of Authorization) were signed. At this point the tasks move from evaluation and forecast to implementation of cost reduction management. The four documents enable NCRC to negotiate lower costs from both current and alternative suppliers.
NCRC began communicating and negotiating with current suppliers and selected alternative suppliers. Service requirements were carefully identified and are a key to negotiation. Service is never comprised and the goal is to equal or improve service levels at lower costs. Historically, 41% of expense reduction savings come from current suppliers. In a few instances, the number of suppliers was consolidated. At the end of 8 weeks, NCRC presented our Findings and Recommendations Analysis Report which specifically detailed annual savings by category and supplier including proposed new alternative suppliers.
Based on the initial findings and subsequent implementation of cost reduction through NCRC’s proprietary Cost Reduction Process, the client is achieving and will exceed NCRC’s forecasted annual savings of 6%. Additional expense categories were added. The staff was highly charge with the improvement in Cash Flow and warmly embraced working with two alternative suppliers.