Why Use a Cost Management Consultant

Why Use a Cost Management Consultant

Why Use A Cost Management Consultant?





In 1981, after a misguided expansion into the restaurant business dragged her successful T-shirt company under, Arleen Kahn went looking for a job. She landed a post as an Administrative Assistant at the New York showroom of Edward Fields custom carpet maker. At that time, Edward Fields had 35 salespeople traveling to clients throughout its 11 showrooms across the United States. What it didn’t have was someone to make sure it was getting the best prices for office supplies, rental cars, equipment leases and much more.





“Each office and individual salesperson was using a different company for various services,” Ms. Kahn recalls. “We had no corporate accounts.’ With her fresh, outsider’s perspective, Ms. Kahn was able to get hefty corporate discounts from Edward Fields’ various suppliers. The research and negotiating skills Ms. Kahn honed at Edward Fields became the foundation of her cost management consulting service, AMK Associates.





She has capitalized on the cost-consciousness of the late 1990’s and the present, as well as the shrinking of in-house staffs, to build a business committed to paring expenses for services such as shipping, printing, packing products and office/equipment supplies.





In the current business environment, and with the increase in outsourced services and temporary workers – including temp CEOs and CFOs – AMK Associates’ cost management services are becoming in vogue again. “Businesspeople, especially those that own their businesses, are hesitant to hire full time personnel to do what I do,” says Ms. Kahn. “They hire me to take a close look at their expenses, find out where to cut and negotiate with their suppliers. “There is a great deal of work to be done, but it’s well worth the effort,” say the Office Manager at Donghia Furniture/Textile. “After that, she’s out.”





It takes a detective’s instincts, an archaeologist’s patience and experience to find savings. “Arleen is a digger,” says Nancy Ploeger who was vice president of operations and human resources at Manhattan-based New York Sports Clubs when the company hired Ms. Kahn. “What she doesn’t know she finds out.” The fitness company saved $50,000.





AMK Associates represents a niche in outsourced services that is becoming more in demand especially in the small to medium business segment. Cost management consultants like AMK spend a lot of time going through the paper trail of costs. After examining nine to 12 months of potential client’s invoices, Ms. Kahn prepares a report on what overall savings she could achieve. Once hired, she negotiates vendor contracts and informs a company’s employees of the cost-savings procedures approved by the client. Indeed, rather than immediately dumping a company’s existing vendor, Ms. Kahn tries first to get better prices from them. By doing that with Winmill & Company, an overnight express carrier, she cut their shipping by 60% according to Thomas Winmill. (Ms Kahn stays in touch with ousted vendors, who may she says, be right for other clients.)





And she leaves behind valuable tips, clients say, on negotiating with vendors, preparing order forms and avoiding unnecessary expenses.





“For certain office machines, she taught us to wait until the first breakdown and then get a service contract,” Ms. Ploeger recalls. “She knew which machines broke down and when.”





A home-based sole proprietor in Manhattan, Ms. Kahn bills clients according to their projected savings. Her one-time fees range from $12,750 for savings $20,000 to $30,000., to $95,000.00 for savings from $201,000 to $300,000. She stresses that while she works with vendors, she has no financial ties to any of them.





“A lot of the questions are knotty and the vendors are vocal,” says Mr. Winmill, who had Ms. Kahn serve as Winmill & Company de facto office manager for over 7 years. “Arleen did the dirty work of squeezing vendors and firing them once in a while. Better her than me”. Indeed, it seems some CEOs and CFOs are turning to outside cost management consultants to provide the cover for the unpleasant tasks of cutting ties with long-time suppliers and renegotiating contracts.





As Richard Marcus, President of American Biltrite wrote to his Operating Divisions,


“I want to stress that Arleen does NOT dictate change. Her only job is to let us know our available options and we make the changes we want her to carry out.”





External cost management consultants are not for everyone. “Prospective clients need to have a minimum 25 employees (rank and file),” she says. After 15 years in business, AMK has no plans for the moment to hire a staff and delegate the sensitive tasks to others. “I like the control. Besides, it’s not comfortable to tell a vendor the client will not be using their services anymore.”

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Arleen Kahn is the President and Founder of AMK Associates and a leading analyst of cost management services centered on controlling and reducing businesses' basic operating expenses.



As President, Arleen is involved in all facets of cost containment and vendor negotiations. She has successfully performed assessments for prospective clients, resulting in hundreds of thousands of dollars in savings for those companies who have engaged her services.



Arleen has been a contributor to numerous publications, e.g., Strategic Edge and Management Review, and has twice been featured in Crain's New York Business. Additionally, she is a frequent lecturer on the subject of cost management and has a proven track record of successes working with some of the nation's most well known companies, including Christie's, New York Sports Clubs, Donghia Furniture, and Zwilling J.A. Henckels.



Arleen has served on the Board of Directors of the Manhattan Chamber of Commerce for the past 12 years and received the distinction of being the first Board member to be honored by the MMC's Executive Committee for her service to the Chamber.