Cost Reduction Strategies

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. Following are the key area where you can implement cost reduction methods with significant results. Cost distributions are Raw material: 60% Fuel: 6% Manpower: 11% Advertisement: 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) 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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