Harnessing the Expenses Burden through Efficient Cost Management Strategies by Victor Guevara, Group Finance Manager, Procter & Gamble

1. Harnessing the Expenses Burden
through Efficient Cost Management
Strategies
(How can I reduce costs
continuously?)continuously?)
1
Victor Guevara
Group Finance Manager
Procter & Gamble
guevara.v.1@pg.com
au.linkedin.com/in/victorguevara/
These are the personal views of Victor Guevara and not of his employer

2. Agenda
• Introduction
• Loss Elimination as a Culture
• Preparation
• Analysis
• Execution & Tracking
• Some examples
2

3. Victor Guevara
Group Finance Manager
Procter & Gamble
Australia/New Zealand
Positions Held & Dates
2002 Tax & Treasury Analyst, Australia & NZ
2003 Financial Analyst, Customer Business Development, Aust & NZ
2004 Competitive Intelligence Leader, Australasia, ASEAN, India
Education
University of
Sydney,
B. Commerce –
Accounting, B.
2004 Competitive Intelligence Leader, Australasia, ASEAN, India
2005 Senior Financial Analyst, Skincare, Australasia, ASEAN, India
2006 Plant Finance Manager, Somersby & Scoresby Sites, Australia
2008 Group Finance Manager, Market Operations, Aust & NZ
2010 Group Manager, Corporate Finance and Innovation Diamond
Leader, Australia
2012 Group Finance Manager, Customer Business Development,
Australia & NZ
3
Accounting, B.
Chemical
Engineering (Hons),
1997-2001
CPA (Australia)
External Interests
Captain, Australian
Army (Active
Reserve)
MBTI: INTJ

4. About Procter & Gamble
• Founded: 1837 Market Cap: 212 Bn (USD)
• Employees: 121,000 Revenue: 84 Bn (USD)
• Operations: 70 countries Brands: ~300
4

5. Loss Elimination as a Culture
• Establish need
• Establish target
• Analyse
• Execute
• Track
• Start again
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6. Why do we need to cut costs?
Loss elimination exercises cannot be seen as simply a
finance project, otherwise it won’t be taken seriously
In order to engage the organisation to cut costs, there
needs to be a clearly articulated rationaleneeds to be a clearly articulated rationale
The tone from the top needs to be positive
Without this, the program can never be brought to life
6

7. Benchmarking
Benchmarking is the solid basis behind which we can set the
right targets and glidepath
Without a solid basis, teams will not be (as) engaged to deliver a
random target
Benchmarking can be internal and/or external
Benchmarking should involve financial and non-financial metrics
7

8. Now what do we do?
“Wow, that’s clearly a stretching target. What
are we going to do now?”
“That looks impossible. No way in hell”“That looks impossible. No way in hell”
How do we get started? How do we get
organised?
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9. Current State
Current
Loss
Opportunity
Total Loss
Opportunity
Define the lossesDefine the losses
All losses above the ideal are recoverable, the only issue is
when and how much.
LOSSES
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Ideal State
(ex. Regulations)
Future Loss
Opportunity
Zero State
Future State
Value
added
Ideal CostCost
LOSSES

10. Brainstorming phase
Define the scope
Define the teams / themes
Define the ideal state for each area
Begin loss data collection
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11. Decision phase
From the list of ideas, risk adjust and rank losses
Decide which projects to execute
Assign project owners, timelines, targetsAssign project owners, timelines, targets
Track execution
Fix execution - if off-track
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12. Example of Pareto principle
120
140
160
180
200
$LossEliminationperproject
1,000
1,200
1,400
1,600
1,800
Cumulative$LossElimination
Supplier
Q ualification
M Q M /JO E
12
-
20
40
60
80
100
1 6 11 16 21 26 31 36 41 46 51 56 61
# of Projects
$LossEliminationperproject
-
200
400
600
800
1,000
Cumulative$LossElimination
75% of loss
elim ination

13. Tracking example
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14. What happens if a project
becomes off track
Fix it – understand the root cause
Adjust – CPS may have been too aggressive
Make choices to heavy up resourcing or
investment to accelerate
Ensure we risk adjust the portfolio
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15. What Why?
Why?Why?
Why-Why-Why
Instruction:
Use Why-Why-Why analysis to identify underlying causes to your problems.
Key
Barrier
(what is getting in our way from
meeting the target listed above)

16. Renewal
Remember – Loss elimination is a culture
Once the key projects are on track and some have been
delivered, we need to start expanding the loss portfolio
We celebrate our progress, and move onto the next
part of our journey
The more we look, the more we find. The journey is
continuous
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17. Final Thoughts
Loss Elimination must be part of daily culture
It starts with a strong rationale, benchmarking
and portfolio of ideas
It requires strong tone from the top and support
from all multi-functional team members
It requires decisive choices, strong execution and
tracking
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18. Any final questions?
Victor Guevara
Group Finance Manager
18
Group Finance Manager
Procter & Gamble
guevara.v.1@pg.com
au.linkedin.com/in/victorguevara/