Consulting & AdvisoryFree
Cost Reduction Diagnostic by Effort Required
Send the client's spend data. Get every saving marked as one sign-off or a funded project, with its cost to achieve and last date to act.
River reads the client's ledger against the contracts and the headcount file, and every saving comes back with three things a savings list normally leaves off. What has to happen for it to be real: one person's sign-off, or a funded project. What it costs to get, kept separate from what it saves. And the last date it can be acted on this year. The savings ledger then sorts on the first of those, because a list mixing sign-offs and programmes is a list nobody acts on.
Most cost reduction frameworks end in one column of numbers headed opportunity, built from spend categories and a savings percentage for each. The client reads that column, picks the biggest line, finds out in month two that it needs a system replacement and a lease exit, and writes the whole exercise off as consulting arithmetic. The column that would have stopped that, what each saving takes to realise and what it costs to get, was never on the page. Here it comes first, before any total.
Built for the consultant handed a data extract and two weeks, whose findings must survive a CFO asking what is genuinely actionable. It picks up where the gap analysis said to look, and the surviving lines feed a scored diagnostic pack. If you are the finance lead with a target and a deadline already set, the cost reduction plan schedules cuts against them instead. Reach for this before a turnaround, ahead of a budget round, or when a board wants a number by month end.
The two fields a savings list never has
A saving is the difference between two states, and the cost of moving between them is a separate number most decks never print. Federal procurement has kept the list of what those costs are for decades. FAR 31.205-42 names them one by one: costs that cannot be discontinued immediately, loss of useful value on tooling no other work can use, rental under unexpired leases less their residual value, restorations the lease requires, and settlement expenses. Read it as a checklist and a cost to achieve stops being a guess.
The second missing field is what a line requires before anybody is allowed to act. A headcount saving is not a signature. 20 CFR 639.3 sets the mass layoff test at a single site of employment, at 33 percent of active employees and at least 50 of them. Section 639.5 then tells the employer to look ninety days forward and ninety days back at actions each too small to count on their own, which is what a cost programme quietly builds.
Halverson Distribution, a regional industrial distributor on $142m. The diagnostic found $4,755,000 across $27.6m of reviewed spend, which is the number a normal deck prints and stops at. Sorted, $1,029,000 needs four signatures and nothing else. $345,000 is real and locked behind renewal dates. $3,167,000 needs $2,974,000 spent to reach it, which is 94 percent of its own first year. And $214,000 carries a 92 month payback and belongs nowhere near the deck.
How it works
Send the extract
The ledger by account and vendor, plus whatever the contract folder and the headcount file hold.
Set the appetite
Say whether this client can fund a project at all, because that decides which lines are worth working.
Read the buckets
Signable now, real but dated, worth funding, and the ones to leave alone, each with its numbers.
Argue a line
Ask what a cost to achieve is built from, or drop in the contract that finally arrived.
What you get
- Every line marked as one person's sign-off this quarter, or a project that needs a budget
- Cost to achieve on its own line, so the net figure and the payback are both visible
- The last date each saving can be acted on before it renews away for a year
- Headcount lines aggregated by site and by window rather than by company total
- The savings the sheet recommends against, with the arithmetic that killed them
- A comparator set to the client's own best site instead of a median nobody can check
Common questions
What makes a saving a sign-off rather than a project?
One named person can approve it inside the quarter with no budget, no system change, no consultation and no capital spend. That is a sign-off. Everything else is a project, including anything needing a supplier requalification, a lease exit or a headcount action. At Halverson, an illustrative distributor, four sign-offs covered $1,029,000 and cost nothing to get.
Why does the cost to achieve get its own column?
Because a saving net of nothing is not a saving. Halverson's three fundable projects were worth $3,167,000 a year and cost $2,974,000 to reach, which is 94 percent of the first year of them. They are still worth doing, and that is a completely different conversation from the one the gross number starts.
A saving is real but the contract just renewed. Does it drop off?
No, it gets a date. Two of Halverson's overlapping software agreements auto-renewed five weeks before the diagnostic started, which parked $198,000 until the following February. It stays on the sheet with the date against it, and the dates come out of the contracts, read to the clause, rather than off a spreadsheet. Where the whole software estate needs that treatment, the systems assessment dates every application.
Two of our lines each cut fewer than fifty jobs. Is that clear?
Not on its own, and this is the join worth making. Nine roles went at Halverson's Fresno site in November and forty-four more in December, forty-three days apart. Company-wide that delayering was fourteen people. At that one site it was fifty-three of a hundred and forty-eight, which is where the aggregation test starts to bite.
You recommend against some of your own findings?
Yes, and it is the most useful thing on the sheet. The ERP module swap at Halverson saves $214,000 a year and costs $1,640,000 to put in, a 92 month payback. Printing that as an opportunity and letting the client find the payback in month three is how a diagnostic loses its credit.
Where do the comparators come from?
From the client wherever possible. Halverson's freight comparator is their own best distribution centre at $1.96 a case, which nobody in the room can argue with. The gap to it was $972,600 and only $626,000 survived once lane length came out. Published figures are the fallback, and they need the comparability work.
Where does this sit in the engagement?
Week one, running alongside the operating work rather than after it. The buckets are what the closing meeting is actually about, and the dated lines set its deadlines. The revenue side runs in parallel in a sourced SWOT of the client's market, because a cost case built on a wrong growth story gets reopened. Whatever survives goes into the findings and recommendations set with the cost to achieve attached.
Sources
Built by
Chandler Supple
Co-founder & CEO, River
Chandler has spent the last six years working in AI, building tools for millions of users and Fortune 100 companies. In 2025, he co-founded River to build a new kind of operating system for AI agents.
Cost Reduction Diagnostic by Effort Required
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