Cost Reduction

In any cost reduction effort always use the theme: “There is always a better way to do anything!”

The key to Cost Reduction is to retain the function of anything and reduce the costs without jeapordzing quality.

Cross-functional teams, and brainstorming, are critical to Cost Reduction using Pareto’s 80/20 principle to find the top to bottom cost reduction items. Have the item in front of the team: This helps with generating ideas.

Use your Suppliers for Cost Reduction. They are the specialists in their field of expertise. Ask them pointed questions for Cost Reduction: Is there a standard item that can replace the special item we request? Can some process steps be eliminated and yet retain the function? Is there a better cost reduced finish that we can consider?

Consider having a Suppler Day for Suppliers of the item/commodity in question. This works very effectively, if planned and executed well.

About cmintrieri

A credible and proactive Logistics, Imporrtation, Supply Chai and International Purchasing Consultant. I have been with top tier companies; The Schwinn Bicycle Company, General Binding Corporation (GBC) and Gardenway, TROY-BILT Rototillers, as a Materials Management, Supply Chain Director I have been an ERP Project Leader (GBC) for the successful implementation of MSA software in 14 months with a great cross-functional ERP team. I was the Value Analysis Administrator with cross-functional teams looking at various GBC binding and shredding equipment Cost Reduction. This was a veru successful program thanks to the various VA teams who made Cost Savings happen. I did the same as a Consultant for Grand Transformer in Grand Haven, MI. The varius Value Analysis cross-functional teams experienced great Cost Reductions on transformers and Top Management was able to visit their largest customer, Otis Elevator, and offer them Cost Reduced transformers. In turn, Otis gave Grand Trasfornmer a five (5) year contract. I have specialized in Daily Cycle Counting for Inventory Records Accuracy. I have coached many manufacturing and Distribution companies in reaching a 98-100% Daily Inventiory Records Accuracy and the ability to eliminate costly, time consuming, Physical Inventories. I have implemented SWOT in companies, created S.O.Ps in others and assisted in Ship-to-use implementations. I am very people oriented. Bottom line, it is the people, who once trained and educated, make it happen with discipline and effective implementation of new concepts.
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