cost reduction startegies

http://www.factory-costreduction.com/

SAVINGS FOR PROFITS © BY SUBODH KUMAR SINGH

 

In   today’s world when Corporate are struggling for profits and with fierce competition in the market, cost reductions, productivity enhancement and lean organizations have become today’s mantra s for survival.Folllowing are the key area  where you can implement cost reduction methods with significant results.Cost distributions are

Rawmaterial : 60%                                                         

Fuel: 6%                                                                             

Manpower:11%

Adverisement :5%

Logistic:9%

Taxes : 5%

Maint & others : 4%

Following are major areas of

1.     Raw material procurement:

a)   Bulk buying

b)   Opportunity buying

c)    Make or buy

d)   Annual Rate contracts

 

2.     Logistics- Inbound and Outbound:

 

a)   Route mapping

b)   Loadability

 

3.     Warehouse and Stores:

a)                Low inventory

b)                Space management

c)                 EOQ

4.     Manufacturing Process (Production) : 

a)        Manufacturing

b)         Automation

c)          OEE

 

5.Energy, fuel & Water 

a)   Motors

b)   Lighting

c)    Compressors

d)   Fuels

e)    Recycle

f)     Waste water management

6.Information Management

     Enterprise Resource  management

 

7. Human Resources

       Out sourcing

 

 

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