Navigating Economic and Supply Chain Headwinds

One recent analysis warns that disruptions from geopolitical flashpoints could cost global supply chains over $1 trillion in 2025 . At the same time, record-low unemployment and aging demographics mean persistent labor shortages across industries, a trend expected to continue into 2025 . These factors are driving up input costs, wages, and uncertainty in supply networks. CSCOs also face rising customer expectations around sustainability and the mandate to invest in digital transformation for resilience. In fact, fully 50% of supply chain organisations were expected to invest in AI and advanced analytics by 2024 – indicating that even amid budget constraints, digital initiatives remain critical.

Pressure on CPG and Industrial Companies

These macro pressures are acutely felt in the consumer packaged goods (CPG) and industrial sectors. After several years of rising input prices, costs have essentially “reset” at a higher level. By late 2024, prices in the EU and US were 20%+ higher than in early 2020 , reflecting the cumulative impact of inflation. A recent industry barometer found 94% of European consumer goods manufacturers experienced surging costs in the past year . Supply disruptions are widespread – 88% of EU FMCG makers faced sourcing or production challenges in the last year, with over a third forced to curtail output as a result . Meanwhile, customers are pushing back. In one survey, 80% of consumers in Europe and the US said they were cutting spending due to the higher cost of living . Companies can no longer simply pass on cost increases; instead, they must dramatically restructure their cost base to protect margins and fund new investments (like digitalisation and sustainability) demanded by the market.

The Case for Rapid Cost Restructuring

For CSCOs, the imperative is clear: achieve rapid cost restructuring to drive efficiency and savings now, while safeguarding the business’s future competitiveness. Unlike routine cost-cutting or annual budgeting tweaks, rapid cost restructuring is a data-driven, end-to-end effort to reinvent the cost structure. It involves quickly pinpointing inefficiencies (in procurement, manufacturing, logistics, overhead, etc.) and taking action to remove waste, renegotiate inputs, and redesign processes for leaner operations. Crucially, this approach balances short-term gains with long-term value.

When executed correctly, it delivers immediate margin relief and builds resilience for the future . (Notably, in private equity-backed companies – common in the industrial and CPG space – there is extra urgency: an estimated $530 billion in portfolio company debt comes due by end of 2025, raising the stakes for EBITDA improvement .) In sum, rapid cost restructuring enables organizations to weather the current storm of rising costs and volatility, while positioning them for growth when conditions stabilize.

Final Thought

Before launching the next wave of initiatives, take a step back. And:

• Diagnose Costs with Data: Leverage advanced analytics and benchmarking to quickly pinpoint cost drivers and inefficiencies across the supply chain.
• Capture Quick Wins: Deploy battle-tested playbooks (e.g. spend consolidation, process automation, and productivity boosts) to deliver tangible savings and cash flow relief immediately.
• Enable Long-Term Transformation: Redesign organisational processes and build capabilities so that initial savings are sustainable – laying the groundwork for continuous improvement and digital enablement.

These actions may redefine your priorities—and accelerate your path to measurable results.