Cost Management And Reduction
Cost management plays a vital role in the success of any business. Business entities have to adjust the operating structure with the market.
The extent of modification on existing processes depends on the extent of the change required. Implementation & management of a proper cost reduction program requires re-looking into the processes and the reconfiguration of existing systems leading to appropriate cost management. A long-term cost strategy may also take outsourcing, off-shoring and the replacement or rationalization of existing business operating structures into consideration.
Our sustainable cost reduction approach puts in place key enablers across the organization that combine value chain insight and Zero-Based Budgeting across direct, indirect, people and property. Our strategic cost management levers can help you:
- Understand what is the cost and what are its drivers
- Know how any activity relates to cost and output
- Extract non-value-added cost with the right lever
- Embed accountability with visibility
- Get greater spend visibility and insight on cost structures
- Align cost to activity and output across the value chain to identify non-productive activity
- Understand cost drivers and improve articulation of strategic plans
- Drive out sustainable savings by including in-depth cost analysis and powerful bench-marking
- Optimize working capital operations
- Improve budgeting and cost estimation
- Identification of the activities which are of limited value
The following strategies are among those available for reducing and controlling costs:
- Budget, plan and monitor
- Review of purchasing procedures including authorization processes, spending limits and No. of people authorized to make purchases.
- Review of suppliers including terms of purchase from existing suppliers, the proposal from alternate suppliers, a strategy of purchase orders, invoices and payments.
- Review of the supply chain process
- Overall financial management
- Review of inventory related costs
