Cost savings programme strengthens staff’s know-how

Based in Andoain (Spain), Itasa is a family business dedicated to the manufacture of high-quality silicon papers with very diverse applications in the sectors of automotive, hygiene or medical supplies. The company has experienced a strong growth over the past five years, mainly due to export. Export represents actually over 80% of the company’s total turnover in the last financial year which closed in excess of 60 million Euros. Itasa, during the period of growth also invested almost 30 million Euros to equip their facilities with state-of-the-art technology. 125 staff are employed at their 15,000m2 factory.

When in 2012 the consultant established the first contact, he came across a highly professional family business, with an excellent reputation within their industry. Luis Lozón, Expense Reduction Analysts Client Manager for the Itasa project, says: “Itasa was a very serious client, with a strong awareness of its position and driven by efficiency criteria. It certainly did not have any of the clichés usually associated to family businesses. The company had good cost management and high requirements for the saving measures.” Lozón adds: “With their ongoing improvement mindset, Expense Reduction Analysts and their methodology were perfectly well fitted”.

The client had done their homework. Javier Hernández, CFO of Itasa and first contact on the project, explains: “Reducing and controlling costs are the cornerstones in the management of any business and we are applying with the main raw materials”. Itasa however needed on one hand, someone external to check their cost management and apply rigorous and professional criteria to confirm that everything was done properly; on another hand, “there were some cost categories such as energy or telecommunications, in which the technical knowledge required is of such a high level that it is beyond our capabilities”, Hernández acknowledges.

When it came to finding a company expert in cost optimisation, Itasa decided to go for Expense Reduction Analysts. “The reason for this choice is simple: they came recommended. We established a first contact and liked the professionalism and flexibility they demonstrated”, he adds. The cost reduction projects managed by Expense Reduction Analysts are assigned to a project manager and to expert consultants in charge of one or several cost categories in the feasibility study. “This structure is quite appropriate, as long as the project manager responds swiftly to the client’s daily concerns or questions on the project; this is what happened in our case.”

Itasa agreed to investigate the seven cost categories identified by Expense Reduction Analysts in the feasibility study. Hernández explains that in some cases, there were no significant results in terms of savings, because the company is very cost-aware, however “the project was worthwhile because of the level of knowledge passed on to the technical team involved. Listening to the consultants talk about energy or telecommunications was invaluable to us. They are expert consultants with extensive knowledge and working together to avoid blind spots has been beneficial to all”, he says.

The collaboration with Expense Reduction Analysts has led to new ways of doing things at Itasa. “Their involvement in the negotiations with our packaging suppliers has meant a much clearer price system and has given us one of the largest percentage of savings of the project” explains Hernández.”Furthermore, with regards to pallets, we were offered two alternative suppliers just in time, as the incumbent supplier closed his business practically at the start of the negotiations”, he adds.

Lozón stresses that the saving project was important to show flexibility and adaptability to the needs customers’ needs.”For example, for the category of transport, we have tried to broaden the range of opportunities to meet their customers’ requirements”, he explains.

“I think that with regards to cost reductions, it is difficult to be completely satisfied. However, the expertise and power of negotiation of a company such as Expense Reduction Analysts has provided us with significant reductions in the cost categories identified and the knowledge that we will be in charge from now on”, concludes Hernández.

 

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