"Cost Savings" is Not a Dirty Word
Throughput Show Episode 2 featuring Chad Bareither (originally aired 09/11/2025)
This week, we’re joined by Chad Bareither, founder of Bareither Group Consulting, who has spent nearly 20 years helping manufacturing organizations improve operational performance, stabilize processes, and build healthier cultures.
Chad joined us to challenge a common belief in manufacturing: that “cost savings” automatically means fear, cuts, and trimming the fat. Instead, he argues that cost savings—done right—are a powerful way to fuel your company’s vision, support your people, and accelerate transformation.
In this conversation, we break down what cost savings should really mean, how leaders can rally their teams behind a cause bigger than money, and why clarity of purpose is the most underrated lever for operational improvement.
1. Cost Savings vs. Cost Cutting: Leaders Are Framing the Problem Wrong
For many leaders, the phrase cost savings feels synonymous with layoffs, cuts, or budget slashing. As Chad pointed out, that’s because too many organizations treat money as the destination instead of the fuel.
Most people don’t show up to work just to “make money for someone else.” Profit is simply the outcome of satisfying customers and running an efficient, high-performing operation. Reframing cash as a tool—not the goal—changes the entire conversation.
When employees understand why cash needs to be freed up (new products, investments, equipment upgrades, customer expansion), cost savings suddenly feel aligned with a shared mission instead of a mandate from above.
2. Case Study: Turning a Cost Savings Push Into a Site Transformation
Chad shared a real transformation story from a Detroit facility his team supported. In just one month, the local team rallied behind a shared cause and built a plan that projected:
$1.5M in net cost savings within the calendar year
Another $800k rolling into the following year
A dramatic reduction in inventory errors (800 → 150 per week)
Faster decision-making through daily management
A 38% average improvement in leadership skills across future leaders
The key insight:
People don’t rally around a plan—they rally around a cause.
Once the team understood why the business needed to free up cash (to reinvest in growth), they didn’t wait for leadership to design the roadmap. They created it themselves.
3. Lean Thinking: What Are You Reinvesting Into?
Chad referenced one of his favorite lean concepts: freeing up cash is only useful if you reinvest it.
Lean is about:
Freeing cash
Reinvesting it into new products, growth, and customer service
Strengthening long-term competitiveness
Cost savings are only “dirty” when the goal is simply to enrich owners or squeeze the operation. When the goal is investing back into the business, teams see the purpose and get on board.
4. The Leader’s Role: Set the Vision, Don’t Pretend You Have All the Answers
A major theme of Chad’s approach is transparency and vulnerability.
Leaders don’t need to know:
Every cost bucket
Every hidden inefficiency
Every improvement opportunity
But they do need to:
Share the vision
Explain why improvement matters
Ask their team where the cash is hiding
Invite them into the planning process
Most organizations incorrectly assume leaders should design everything. In reality, the people closest to the work can spot opportunities leadership would never see.
Leading with vulnerability (“I don’t know everything; I want us to figure this out together”) accelerates trust and ownership.
5. Where Is Your Focus? A Self-Audit for Every Manufacturing Leader
Chad ended with a practical exercise: draw a simple pie chart showing where your mental energy goes.
On an average week, how much of your time is spent thinking about:
Financials?
Operational problems?
People development?
Most leaders dramatically overweight operations or financials and underinvest in developing people. But long-term cost savings—and true transformation—come from building capacity in your team.
Not every company needs cost savings right now. But every company needs clarity, alignment, and leadership that connects improvements to a meaningful future.
CALL TO ACTION / BEST PRACTICES
Here are the actions Chad encourages every leader to take:
Define the cause before defining the plan.
Don’t start with “how.” Start with “why.”Share your vision transparently.
Show the team what the business is trying to build in the next 12–36 months.Ask your team where cash is hiding.
They know better than anyone where waste, delays, overprocessing, and hidden costs live.Stop treating money as the goal.
Teach your team that cash is fuel for reinvestment and stability.Reframe cost savings as transformation.
The work isn’t about cutting—it’s about creating capacity and opportunity.
Q&A FROM THE EPISODE (Distilled & Cleaned)
Q: How do you get frontline teams to buy into cost savings without triggering fear?
A: Frame cost savings as a reinvestment strategy—not a threat. Explain what the business is trying to accomplish and how their efforts directly support the future.
Q: Can leaders run a transformation effort themselves, or do they need outside help?
A: You can absolutely do it yourself. But you must ask the right questions, stay transparent, and let the team design the plan. The leader provides vision, not all the answers.
Q: How do you uncover hidden cash in the business?
A: Ask. Your team knows where the waste exists. Invite them to share openly and reward transparency.
Q: How do you balance financial focus with people development?
A: Audit your time. Leaders often over-focus on financials or firefighting. Long-term results come from growing future leaders who solve problems independently.
Q: How would you summarize the entire episode in one sentence?
A: “Don’t worry about how you’ll make improvements until you’ve clarified why the improvement needs to be made.”