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COST CUTTING IDEAS

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Improve productivity

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Reduce rejections

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Reduce production stoppages

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Convert Sr employee into supp/ dispose old m/c

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Cut OT/Sub contracting

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Salary cuts, postpone increments/promotions reduce perks, benefits

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Temp layoff - Recruit on demand, pay partly

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Increase weekly off; w/o pay

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Reduce the rank/level/class of expenses

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Convert Sr employee into supplier

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Employ higher productive labour/machine than less productive

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Employ part time labour esp for legaliadminfaccts

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Employ temp labour from group/known companies for peak prodn

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Train all for all jobs - Job rotation

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Manage e mails; reduce links, converge decision making points

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Use broadband - utilise employee for other works

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Couple related works

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Incentives for employees to prevent wastage

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Combine deliveries/reduce no. of deliveries

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Reduce rejection/rework/service calls

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Reduce variations/errors > 6 Sigma

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Think small/special - Smaller SPMs instead std bigger m/c

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Plan ahead > Concept R & Ds/assembly trials before making toolings

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Change inputs - MU/supplier/process

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Review non product spec of no value activities - packaging/packing/

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Review inspection cost/extent of sampling; simplify inspn aids

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Review mtl/process spec for the latest technology/range

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Review courier/fax to postal

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Review courier matter/combine/mail and courier periodical summary

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Combine suppliers > fully BO/sub assemblies/assembfies

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Bulk purchase and reduce prices

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Standardise mtl spec/size/reduce varieties

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Reduce prices with suppliers - Flat bargain

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Work with suppliers targeting improvement in Q & Productivity > price

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Involve all employees in cost/productivity/Q improvements

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Reduce the slack> luxury like several company vehicles/mobiles

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Reduce slack > Higher power genset/low productive V I shift

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Reclassify the overheads responsibility

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Verify purchase cost based on value and negotiate

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Review cost data, update the processes and the norms, prices

41

Revalue all the administrative works- delegate/eliminate

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COST CUTTING IDEAS

42

Eliminate unnecessary/non utilised reports/redesign to simplify

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Eliminate report copies to no value adding executives

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Bust the bureaucracy - delegate authorities

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Avoid/reduce recruitment costs- Ads in a liers size/appearances

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Avoid smoking/drinking habit persons waste of time/leave due to ill health

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Standardise parts to reduce inventory/reduce purchase cost

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Plan well ahead at micro level to reduce errors/variations at all levels

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Change of raw mt supplier

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Combine purchase/delivery trips o vans

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Change of raw mtl spec

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Change of production methods/machines

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Postpone fringe benefits and disburse later retrospectively

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Order for bulk to reduce the price and plan for delivery schedules

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Concentrate more on the higher cost materials/suppliers (Pareto)

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Suggestion scheme specifically on cost reduction

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Reduce delegations to expedite the decision making

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Review each rule/regulation to ensure real value addition

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Reduce ofice space/equipment like computer; staf can work in shits

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Purchase bulk for cash; reducing overheads in follow up; transport etc

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Review the training need, methods

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Review internal trainer to train for the needs

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Look for freelance trainers to reduce the cost

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Contract for 3 year training schedule and bargain with the institute

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Plan for measured growth in proportional scale

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Eliminate strict procedures for small items/activities -requisitions for carbon, permissions

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Link Capex and business plans to avoid quick obsolescence of assets

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Centralise capex of all depts/all group companies/divisions

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Ensure the auditors/legal advisors are tough and ask critical questions

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Ensure the basic data are correct before making capex/investments

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Check for any hidden risks in capex/investment pushing the cost up

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Check if the capex/investment will improve the productivity really on short term basis

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Consider min 3 alternatives before deciding on any capex/investments

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Avoid futuristic capex/investments with hopes of utilisation

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Eliminate low margin products

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Delay the new ventures/new branches/divisions

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Review the real value of the premium location of ofice

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Cut down the size of the sales office according to the customer population

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Do the back office work in premium location to night to reduce the space cost

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Outsource back office works

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Encourage home work, reducing office maintenance cost (A/c, network etc

82

Shift the company to a low cost place (transport the employees)

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COST CUTTING IDEAS

83

Rectify the old ec tlriment dedicated to some work

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Replace the old equip with latest if the time saving results in net cost reduction

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Reduce inventory carrying cost (keep it in transit or the supplier's go down nearer to you)

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Reduce the credit period to the customers

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Lengthen the credit period to the suppliers

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Reduce the production cycle time - .HT, Lean Manufacturing

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Avoid idle cash time; rotate cash efectively

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Close old debts with new loans reducing the cumulative interest efects

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Rearrange the loans short term to long term to reduce the interest; interest frequency

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Sell assets that are not appreciating/will not appreciate

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Reduce/postpone/disburse in installments > dividends/bonus/benefits

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Lease the assets/investments - m/c; vans, building, genset instead of buying

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Employ concurrent engg to reduce design/dev time

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Produce wire cut parts instead thro tooling for development

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Use parts from products available in market instead developing tooling for development

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Improve the accuracy of the costing ( get more precise costing data)

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Improve cross functional communications

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Make sure all the employees of the depts are aware of the activities of all the depts

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Identify the higher cost activities in the production cycle (Pareto) and focus on top few

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Check and reduce non productive hours - m/c breakdown, absenteeism

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Redesign the fast moving high volume products for cost reduction

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Make cost reduction a fulltime job to a team (size according to the need)

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Outsource cost reduction (your trade information will go out)

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Find out the cost of all production activities and analyse for make or buy (sub contract)

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Allocate overheads project wise/product line wise for better control

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Work on profit center concepts

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Isolate activities/products yet to be established for close watch

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Reward and encourage individuals/sections/dept/divisions for better cost controlling

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Advertise the achievements of individuals/sections/diviSions among the entire company

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Interchange the cost reduction team between departments/divisions

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Try to get solutions through diferent technology groups

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Encourage conflicts among managers as much as you can mange to get all sorts of views

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Rotate functional heads

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Rotate employees among relevant functions

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Employee transfer - Strengthen the weaker depts/Restructuring

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Employee VRS

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Incentives for employees to prevent wastage

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Reduce slack > Higher power genset/low productive 3rd shit

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Order for bulk to reduce the price and plan for delivery schedules

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Review each rule/regulation to ensure real value addition

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Do the back office work in premium location to night to reduce the space cost

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COST CUTTING IDEAS

124

Analyse the customer category, their purchasing patterns scientiically to improve forecasting

125

Allocate overheads project wise/product line wise for better control

126

Avoid credit/reduce credit terms

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Review cust reqt; slight reduction in parameters > share cost reduction

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Design to the purpose/cust reqt - no frill products

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Optimise transports/material handling

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Redesign/reduce sales touring, cust visits, demo, exhibitions etc

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Alt plan for costly hotels/negotiate/standardise travel styles

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Review each form of all dent to avoid diinlicatino writinn/data entry

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Combine forms/records to reduce no of forms/records

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Share the records among several depts and reduce no of copies

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Correlate and review communication hierarchy, speed, clarity delaying decisions

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Check if technology (even if it is costly) can reduce the cost eventually

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Check how each activity/process is carried out in world class companies

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Combine sales promotions visits

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Reduce customer hosting cost; hotel level, course level etc

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Fix/review minimum order value, minimum order quantities

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Close prodn lines/divisions/branches

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Identify the need for each person in sales ofices at premium place

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Split the no value added activities carried out in premium cost place

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Encourage the cash sales through incentives

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Increase the number of cash sale products

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Improve market forecasting accuracy thro latest techniques/technology

147

Reduce product liability terms

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Use technology to reduce process time in all dept CAD for design/e mail etc

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Analyse the customer category, their purchasing patterns scientifically to improve forecasting

150

Conduct decision making meetings to avoid delay (provide all info early for home work)

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Watch closely if any customer is going away

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Watch if the purchasing frequency of any customer is decreasing and learn why

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Focus the product range for no of customers, volume of business, frequency of sales etc

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Correlate the above and the profit margins

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Increase the price marginally in high volume selling products alone

156

Implement the price increase in stages

157

Focus on all improvement activities on high volume products

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Employ six sigma, lean manufacturing methods, lean six sigma etc in al/depts/processes

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Find out low end markets for tough quality product to relax tolerances/spec

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Find out premium markets for high quality products for premium pricing

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Bench mark processes from totally dif industries/regions - work instructions in Bihar coal mines

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