Cost Reduction Analysis: Tools and Strategies (Wiley by Steven M. Bragg

By Steven M. Bragg

Discover the instruments for realizing the prices your organization should still reduce, with out impacting its skill to carry items and services

New from Steve Bragg, this ebook presents the instruments for settling on which expenses a firm may still reduce, with out impacting its skill to carry items and companies. It explains how you can use throughput research with the intention to find bottleneck operations in a firm, which in flip dictates the place capital investments should still (and aren't) be made.

  • Delves into technique research, to figure out the place extra assets are getting used in a enterprise process
  • Describes the complete price of possession, exhibiting how a unmarried procuring choice really snowballs right into a number of ancillary costs
  • Shows tips to create and use a spend administration procedure to minimize procurement costs
  • Shows how just-in-time structures can be utilized to cast off stock costs

Cost relief research: instruments and Strategies presents examples to teach how a lot expense can probably be eradicated to prevent drastic motion later that could imperil your corporation's course and future.

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Extra resources for Cost Reduction Analysis: Tools and Strategies (Wiley Corporate F&A)

Sample text

The information required for this customer mix matrix can require considerable effort to assemble but provides an invaluable view of where a company really makes its money and therefore where it should target its selling efforts. Customer Class Analysis Another way to review selling costs is to create an income statement that is differentiated by class of customer. Marketing and distribution costs may differ for each class, resulting in substantially different profits for each one. 2. In the exhibit, there are substantially different results for each customer class.

For example, the use of a pull system is critical for minimizing an inventory investment, whereas throughput analysis is quite useful for evaluating fixed asset purchases, and a simple laundry list of options should be incorporated into an employee benefits review. Further, cost reductions in spend analysis are closely tied to supplier consolidation, while maintenance, repair, and operations spending calls for close cooperation with a preferred distributor. In short, there is no easy way to reduce expenses; doing so requires knowledge of a broad set of tools.

12. This can be an extremely effective way to convince senior management to support cost reductions, especially when they see the improvement in net profit, as shown in the example. 13 Cost Reduction Status Report (000s) Expense Category Direct labor Direct materials Administration labor Production supplies Supplies Advertising Totals Cost Reduction Goal Identified Cost Reductions Completed Cost Reductions Achieved Reduction Run Rate $490 0 640 $0 0 600 $0 0 340 $0 0 220 520 120 40 40 200 380 $2,230 180 280 $1,180 180 100 $660 140 100 $500 tion project.

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