7/28/2019 COST CUTTING IDEAS.pdf

1/4

1 Improve productivity

2 Reduce rejections

3 Reduce production stoppages

4 Convert Sr employee into supp/ dispose old m/c

5 Cut OT/Sub contracting

6 Salary cuts, postpone increments/promotions reduce perks, benefits

7 Temp layoff - Recruit on demand, pay partly

8 Increase weekly off; w/o pay

9 Reduce the rank/level/class of expenses

10 Convert Sr employee into supplier

11 Employ higher productive labour/machine than less productive ...

12 Employ part time labour esp for legaliadminfaccts

13 Employ temp labour from group/known companies for peak prodn

14 Train all for all jobs - Job rotation

15 Manage e mails; reduce links, converge decision making points

16 Use broadband - utilise employee for other works

17 Couple related works

18 Incentives for employees to prevent wastage

19 Combine deliveries/reduce no. of deliveries

20 Reduce rejection/rework/service calls

21 Reduce variations/errors > 6 Sigma

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

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

24 Change inputs - MU/supplier/process25 Review non product spec of no value activities - packaging/packing/

26 Review inspection cost/extent of sampling; simplify inspn aids

27 Review mtl/process spec for the latest technology/range

28 Review courier/fax to postal

29 Review courier matter/combine/mail and courier periodical summary

30 Combine suppliers > fully BO/sub assemblies/assembfies.....

31 Bulk purchase and reduce prices

32 Standardise mtl spec/size/reduce varieties

33 Reduce prices with suppliers - Flat bargain

34 Work with suppliers targeting improvement in Q & Productivity > price

35 Involve all employees in cost/productivity/Q improvements

36 Reduce the slack> luxury like several company vehicles/mobiles ...

37 Reduce slack > Higher power genset/low productive VIshift

38 Reclassify the overheads responsibility

39 Verify purchase cost based on value and negotiate

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

41 Revalue all the administrative works- delegate/eliminate

COST CUTTING IDEAS

Page 1 of 4

7/28/2019 COST CUTTING IDEAS.pdf

2/4

COST CUTTING IDEAS

42 Eliminate unnecessary/non utilised reports/redesign to simplify

43 Eliminate report copies to no value adding executives

44 Bust the bureaucracy - delegate authorities

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

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

47 Standardise parts to reduce inventory/reduce purchase cost

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

49 Change of raw mt supplier

50 Combine purchase/delivery trips o vans

51 Change of raw mtl spec

52 Change of production methods/machines

53 Postpone fringe benefits and disburse later retrospectively

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

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

56 Suggestion scheme specifically on cost reduction

57 Reduce delegations to expedite the decision making

58 Review each rule/regulation to ensure real value addition

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

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

61 Review the training need, methods

62 Review internal trainer to train for the needs

63 Look for freelance trainers to reduce the cost

64 Contract for 3 year training schedule and bargain with the institute

65 Plan for measured growth in proportional scale66 Eliminate strict procedures for small items/activities -requisitions for carbon, permissions

67 Link Capex and business plans to avoid quick obsolescence of assets

68 Centralise capex of all depts/all group companies/divisions

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

70 Ensure the basic data are correct before making capex/investments

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

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

73 Consider min 3 alternatives before deciding on any capex/investments

74 Avoid futuristic capex/investments with hopes of utilisation

75 Eliminate low margin products

76 Delay the new ventures/new branches/divisions

77 Review the real value of the premium location of ofice

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

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

80 Outsource back office works

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

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

Page 2 of 4

7/28/2019 COST CUTTING IDEAS.pdf

3/4

COST CUTTING IDEAS

83 Rectify the old ec tlriment dedicated to some work

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

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

86 Reduce the credit period to the customers

87 Lengthen the credit period to the suppliers

88 Reduce the production cycle time - .HT, Lean Manufacturing

89 Avoid idle cash time; rotate cash efectively

90 Close old debts with new loans reducing the cumulative interest efects

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

92 Sell assets that are not appreciating/will not appreciate

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

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

95 Employ concurrent engg to reduce design/dev time

96 Produce wire cut parts instead thro tooling for development

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

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

99 Improve cross functional communications

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

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

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

103 Redesign the fast moving high volume products for cost reduction

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

105 Outsource cost reduction (your trade information will go out)

106 Find out the cost of all production activities and analyse for make or buy (sub contract)107 Allocate overheads project wise/product line wise for better control

108 Work on profit center concepts

109 Isolate activities/products yet to be established for close watch

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

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

112 Interchange the cost reduction team between departments/divisions

113 Try to get solutions through diferent technology groups

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

115 Rotate functional heads

116 Rotate employees among relevant functions

117 Employee transfer - Strengthen the weaker depts/Restructuring

118 Employee VRS

119 Incentives for employees to prevent wastage

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

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

122 Review each rule/regulation to ensure real value addition

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

Page 3 of 4

7/28/2019 COST CUTTING IDEAS.pdf

4/4

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

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

128 Design to the purpose/cust reqt - no frill products

129 Optimise transports/material handling

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

131 Alt plan for costly hotels/negotiate/standardise travel styles

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

133 Combine forms/records to reduce no of forms/records

134 Share the records among several depts and reduce no of copies

135 Correlate and review communication hierarchy, speed, clarity delaying decisions

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

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

138 Combine sales promotions visits

139 Reduce customer hosting cost; hotel level, course level etc

140 Fix/review minimum order value, minimum order quantities

141 Close prodn lines/divisions/branches

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

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

144 Encourage the cash sales through incentives

145 Increase the number of cash sale products

146 Improve market forecasting accuracy thro latest techniques/technology

147 Reduce product liability terms

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

149 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)

151 Watch closely if any customer is going away

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

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

154 Correlate the above and the profit margins

155 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

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

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

160 Find out premium markets for high quality products for premium pricing

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

Page 4 of 4