Newsletter #16
Leaders don’t choose between cost and control. They choose control, or pay for chaos
Feb 10, 2026
6 min-read
Curated by Fabrice Gribon, Founder of Gribon & Company
Practical, field-tested insights on operational excellence and business transformation — for Site Heads and Operations Directors.
The scorecard that nobody looks at…
Several times in my career, my team and I were tasked with leading cost-reduction programmes. The metric was simple and brutal: how many multiples of your team’s salary could you save the company? Three times was acceptable. Five times, and we were superstars. The mandate was always the same: “cut cost”. Whatever it takes. Increase labour productivity. Reduce inventory. Source cheaper raw materials. Close operations. Externalise….etc.
The great news is the savings appeared on the spreadsheet within months. The problems may have appeared on the shop floor much later. The real cost to the business triggered by non strategic cost saving, the one nobody measured, showed up in various ways. It is not unusual to notice after a major cost cutting programme the following:
regulatory findings
supply disruptions
batch failures
customer complaints
If you run a pharmaceutical site or lead operations for a pharma company, you already know the pressure. Gross margin improvement year on year, patent cliffs, IRA pricing negotiations, tariff uncertainty all rolls downhill to your P&L. The instinct to cut is rational. The way most organisations cut might not always be rational based on the many conversations I have regularly with management of companies with ongoing cost-cutting programmes...
I have dug into various articles and publication to find evidence that in several cases cost cutting although necessary for various reasons, has created damage in the long run…
What is the true price of ruthless cost cutting?
The pharmaceutical industry is in the middle of a cost-cutting cycle that has no obvious end. Pfizer launched a programme in late 2023 targeting $4 billion in savings, then added another $1.5 billion in mid-2024—totalling roughly $5.5 billion, with 70% coming from R&D and manufacturing. Bristol Myers Squibb cut 2,200 jobs to save $1.5 billion annually. Bayer shed over 1,500 management positions. These are not small adjustments. They are structural removals of capacity, knowledge, and oversight.
And the consequences are already visible across the industry. As of September 2024, more than 320 essential medicines sat on the US shortage list. The US Pharmacopeia’s 2025 Annual Drug Shortage Report found that 89% of 2024 shortages carried over from the previous year. The average shortage now lasts over four years. More than 40 lifesaving drugs have been in shortage for over three years, with five exceeding a decade. These are not random supply dysfunctions. They are the downstream result of an industry that has spent two decades offshoring manufacturing, squeezing suppliers on price, and treating quality systems as a cost centre rather than a control mechanism.
The numbers tell a clear story: only 24% of active pharmaceutical ingredient manufacturing facilities for US-marketed drugs are still located in the United States. About 60% of APIs come from India, China, and the EU. When a Baxter International plant in North Carolina was damaged by Hurricane Helene in late 2024, it knocked out roughly 60% of IV fluid supply to US hospitals—because the industry had concentrated production in too few sites to save cost. When a tornado hit a Pfizer facility in 2023, it affected production of at least a dozen sterile injectables. Single points of failure are not bad luck. They are the predictable outcome of cost optimisation without control.
How to cut cost without losing control?
Cutting cost is often necessary and it must be done. It must be done the right way.
After years of leading cost programmes and cleaning up after poorly designed ones, I have learned that the difference between a successful cost initiative and a destructive one is not the size of the target. It is whether leadership maintains operational control throughout the process. Here are five principles that separate disciplined cost management from cost-driven chaos. This is not about rejecting cost programmes. It’s about sequencing and governing them properly.
Control comes first, cost cutting second
If a role, activity, or supplier is removed, ask one simple question:
What replaces the control it provided?
If the answer is unclear, it is too early to capture this cost saving
2. Treat inventory and capacity as risk buffers, not just "dead cash"
Inventory reduction looks attractive and is an easy cost down target until variability in your supply chain range of variation increases. Therefore before cutting buffers, ensure the following:
2.1. Process capability is proven
2.2. Supplier performance is stable
2.3. Decision rights are clear
Otherwise, the impact of free cash before the above are in place will create volatility in your operation
3. Centralise standards before you decentralise any of your operations
Local optimisation reduces cost quickly.
Enterprise standards preserve control long term. Standards allow you to decentralise or externalise with control
Standard work, KPIs, escalation rules, and decision thresholds must be defined before pushing accountability down.
4. Define ownership including interface ownership…
Most failures happen at handovers, between:
Quality ↔ Operations
Site ↔ Supplier
Global ↔ Local
If ownership is shared, it is usually unclear. If it’s unclear, control is already compromised. The unexpected (e.g. deviations, equipment failure) will soon happen and impact the performance of your operations
5. Ask the questions most leaders do not ask…
Before approving any major cost-saving initiative, ask your team a simple question:
If we reduce the cost of a critical process filter by switching to a newly approved supplier, what risk does this introduce?
What is the level of that risk?
And, crucially, who is accountable for monitoring that supplier to ensure there is no impact on manufacturing performance?
Strong leaders are not remembered for the savings they delivered in isolation to meet a budget target.
They are remembered for what still worked years later.
Cost matters in every industry.
However, control is what allows cost reductions to last.
Removing cost without reinforcing control does not create long-term efficiency.
It creates fragility, and ultimately impacts patients.
And in the life sciences industry, fragility is never cheap.
So, if you currently have a cost-reduction initiative under way, ask yourself:
Have you identified and mapped where control could be weakened as a result?
Newsletter #16
Leaders don’t choose between cost and control. They choose control, or pay for chaos
Feb 10, 2026
6 min-read
Curated by Fabrice Gribon, Founder of Gribon & Company
Practical, field-tested insights on operational excellence and business transformation — for Site Heads and Operations Directors.
The scorecard that nobody looks at…
Several times in my career, my team and I were tasked with leading cost-reduction programmes. The metric was simple and brutal: how many multiples of your team’s salary could you save the company? Three times was acceptable. Five times, and we were superstars. The mandate was always the same: “cut cost”. Whatever it takes. Increase labour productivity. Reduce inventory. Source cheaper raw materials. Close operations. Externalise….etc.
The great news is the savings appeared on the spreadsheet within months. The problems may have appeared on the shop floor much later. The real cost to the business triggered by non strategic cost saving, the one nobody measured, showed up in various ways. It is not unusual to notice after a major cost cutting programme the following:
regulatory findings
supply disruptions
batch failures
customer complaints
If you run a pharmaceutical site or lead operations for a pharma company, you already know the pressure. Gross margin improvement year on year, patent cliffs, IRA pricing negotiations, tariff uncertainty all rolls downhill to your P&L. The instinct to cut is rational. The way most organisations cut might not always be rational based on the many conversations I have regularly with management of companies with ongoing cost-cutting programmes...
I have dug into various articles and publication to find evidence that in several cases cost cutting although necessary for various reasons, has created damage in the long run…
What is the true price of ruthless cost cutting?
The pharmaceutical industry is in the middle of a cost-cutting cycle that has no obvious end. Pfizer launched a programme in late 2023 targeting $4 billion in savings, then added another $1.5 billion in mid-2024—totalling roughly $5.5 billion, with 70% coming from R&D and manufacturing. Bristol Myers Squibb cut 2,200 jobs to save $1.5 billion annually. Bayer shed over 1,500 management positions. These are not small adjustments. They are structural removals of capacity, knowledge, and oversight.
And the consequences are already visible across the industry. As of September 2024, more than 320 essential medicines sat on the US shortage list. The US Pharmacopeia’s 2025 Annual Drug Shortage Report found that 89% of 2024 shortages carried over from the previous year. The average shortage now lasts over four years. More than 40 lifesaving drugs have been in shortage for over three years, with five exceeding a decade. These are not random supply dysfunctions. They are the downstream result of an industry that has spent two decades offshoring manufacturing, squeezing suppliers on price, and treating quality systems as a cost centre rather than a control mechanism.
The numbers tell a clear story: only 24% of active pharmaceutical ingredient manufacturing facilities for US-marketed drugs are still located in the United States. About 60% of APIs come from India, China, and the EU. When a Baxter International plant in North Carolina was damaged by Hurricane Helene in late 2024, it knocked out roughly 60% of IV fluid supply to US hospitals—because the industry had concentrated production in too few sites to save cost. When a tornado hit a Pfizer facility in 2023, it affected production of at least a dozen sterile injectables. Single points of failure are not bad luck. They are the predictable outcome of cost optimisation without control.
How to cut cost without losing control?
Cutting cost is often necessary and it must be done. It must be done the right way.
After years of leading cost programmes and cleaning up after poorly designed ones, I have learned that the difference between a successful cost initiative and a destructive one is not the size of the target. It is whether leadership maintains operational control throughout the process. Here are five principles that separate disciplined cost management from cost-driven chaos. This is not about rejecting cost programmes. It’s about sequencing and governing them properly.
Control comes first, cost cutting second
If a role, activity, or supplier is removed, ask one simple question:
What replaces the control it provided?
If the answer is unclear, it is too early to capture this cost saving
2. Treat inventory and capacity as risk buffers, not just "dead cash"
Inventory reduction looks attractive and is an easy cost down target until variability in your supply chain range of variation increases. Therefore before cutting buffers, ensure the following:
2.1. Process capability is proven
2.2. Supplier performance is stable
2.3. Decision rights are clear
Otherwise, the impact of free cash before the above are in place will create volatility in your operation
3. Centralise standards before you decentralise any of your operations
Local optimisation reduces cost quickly.
Enterprise standards preserve control long term. Standards allow you to decentralise or externalise with control
Standard work, KPIs, escalation rules, and decision thresholds must be defined before pushing accountability down.
4. Define ownership including interface ownership…
Most failures happen at handovers, between:
Quality ↔ Operations
Site ↔ Supplier
Global ↔ Local
If ownership is shared, it is usually unclear. If it’s unclear, control is already compromised. The unexpected (e.g. deviations, equipment failure) will soon happen and impact the performance of your operations
5. Ask the questions most leaders do not ask…
Before approving any major cost-saving initiative, ask your team a simple question:
If we reduce the cost of a critical process filter by switching to a newly approved supplier, what risk does this introduce?
What is the level of that risk?
And, crucially, who is accountable for monitoring that supplier to ensure there is no impact on manufacturing performance?
Strong leaders are not remembered for the savings they delivered in isolation to meet a budget target.
They are remembered for what still worked years later.
Cost matters in every industry.
However, control is what allows cost reductions to last.
Removing cost without reinforcing control does not create long-term efficiency.
It creates fragility, and ultimately impacts patients.
And in the life sciences industry, fragility is never cheap.
So, if you currently have a cost-reduction initiative under way, ask yourself:
Have you identified and mapped where control could be weakened as a result?
Newsletter #16
Leaders don’t choose between cost and control. They choose control, or pay for chaos
Feb 10, 2026
6 min-read
Curated by Fabrice Gribon, Founder of Gribon & Company
Practical, field-tested insights on operational excellence and business transformation — for Site Heads and Operations Directors.
The scorecard that nobody looks at…
Several times in my career, my team and I were tasked with leading cost-reduction programmes. The metric was simple and brutal: how many multiples of your team’s salary could you save the company? Three times was acceptable. Five times, and we were superstars. The mandate was always the same: “cut cost”. Whatever it takes. Increase labour productivity. Reduce inventory. Source cheaper raw materials. Close operations. Externalise….etc.
The great news is the savings appeared on the spreadsheet within months. The problems may have appeared on the shop floor much later. The real cost to the business triggered by non strategic cost saving, the one nobody measured, showed up in various ways. It is not unusual to notice after a major cost cutting programme the following:
regulatory findings
supply disruptions
batch failures
customer complaints
If you run a pharmaceutical site or lead operations for a pharma company, you already know the pressure. Gross margin improvement year on year, patent cliffs, IRA pricing negotiations, tariff uncertainty all rolls downhill to your P&L. The instinct to cut is rational. The way most organisations cut might not always be rational based on the many conversations I have regularly with management of companies with ongoing cost-cutting programmes...
I have dug into various articles and publication to find evidence that in several cases cost cutting although necessary for various reasons, has created damage in the long run…
What is the true price of ruthless cost cutting?
The pharmaceutical industry is in the middle of a cost-cutting cycle that has no obvious end. Pfizer launched a programme in late 2023 targeting $4 billion in savings, then added another $1.5 billion in mid-2024—totalling roughly $5.5 billion, with 70% coming from R&D and manufacturing. Bristol Myers Squibb cut 2,200 jobs to save $1.5 billion annually. Bayer shed over 1,500 management positions. These are not small adjustments. They are structural removals of capacity, knowledge, and oversight.
And the consequences are already visible across the industry. As of September 2024, more than 320 essential medicines sat on the US shortage list. The US Pharmacopeia’s 2025 Annual Drug Shortage Report found that 89% of 2024 shortages carried over from the previous year. The average shortage now lasts over four years. More than 40 lifesaving drugs have been in shortage for over three years, with five exceeding a decade. These are not random supply dysfunctions. They are the downstream result of an industry that has spent two decades offshoring manufacturing, squeezing suppliers on price, and treating quality systems as a cost centre rather than a control mechanism.
The numbers tell a clear story: only 24% of active pharmaceutical ingredient manufacturing facilities for US-marketed drugs are still located in the United States. About 60% of APIs come from India, China, and the EU. When a Baxter International plant in North Carolina was damaged by Hurricane Helene in late 2024, it knocked out roughly 60% of IV fluid supply to US hospitals—because the industry had concentrated production in too few sites to save cost. When a tornado hit a Pfizer facility in 2023, it affected production of at least a dozen sterile injectables. Single points of failure are not bad luck. They are the predictable outcome of cost optimisation without control.
How to cut cost without losing control?
Cutting cost is often necessary and it must be done. It must be done the right way.
After years of leading cost programmes and cleaning up after poorly designed ones, I have learned that the difference between a successful cost initiative and a destructive one is not the size of the target. It is whether leadership maintains operational control throughout the process. Here are five principles that separate disciplined cost management from cost-driven chaos. This is not about rejecting cost programmes. It’s about sequencing and governing them properly.
Control comes first, cost cutting second
If a role, activity, or supplier is removed, ask one simple question:
What replaces the control it provided?
If the answer is unclear, it is too early to capture this cost saving
2. Treat inventory and capacity as risk buffers, not just "dead cash"
Inventory reduction looks attractive and is an easy cost down target until variability in your supply chain range of variation increases. Therefore before cutting buffers, ensure the following:
2.1. Process capability is proven
2.2. Supplier performance is stable
2.3. Decision rights are clear
Otherwise, the impact of free cash before the above are in place will create volatility in your operation
3. Centralise standards before you decentralise any of your operations
Local optimisation reduces cost quickly.
Enterprise standards preserve control long term. Standards allow you to decentralise or externalise with control
Standard work, KPIs, escalation rules, and decision thresholds must be defined before pushing accountability down.
4. Define ownership including interface ownership…
Most failures happen at handovers, between:
Quality ↔ Operations
Site ↔ Supplier
Global ↔ Local
If ownership is shared, it is usually unclear. If it’s unclear, control is already compromised. The unexpected (e.g. deviations, equipment failure) will soon happen and impact the performance of your operations
5. Ask the questions most leaders do not ask…
Before approving any major cost-saving initiative, ask your team a simple question:
If we reduce the cost of a critical process filter by switching to a newly approved supplier, what risk does this introduce?
What is the level of that risk?
And, crucially, who is accountable for monitoring that supplier to ensure there is no impact on manufacturing performance?
Strong leaders are not remembered for the savings they delivered in isolation to meet a budget target.
They are remembered for what still worked years later.
Cost matters in every industry.
However, control is what allows cost reductions to last.
Removing cost without reinforcing control does not create long-term efficiency.
It creates fragility, and ultimately impacts patients.
And in the life sciences industry, fragility is never cheap.
So, if you currently have a cost-reduction initiative under way, ask yourself:
Have you identified and mapped where control could be weakened as a result?