14 Mar 2008 02:11:36 | subodh kumar singh
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.Folllowing are the key area where you can implement cost reduction methods with significant results.
1. Raw material procurement:
2. Logistics- Inbound and Outbound:
3. Warehouse and Stores:
4. Manufacturing Process (Production) :
5.Energy, fuel & Water
6.Information Management
7. Finance
8. Human Resources
8. Sales & marketing
FEW BASIC IDEAS
PROCUREMENT
IT CAN BE DIVIDED INTO TWO MAJOR GROUP
A. PRODUCT
B. SERVICES
Raw material purchases constitute around 60-65% of the cost of product; hence any savings on this front would be significant for profit of the organization.
1. BULK BUYING:
A. The company which has units spread across the geography can negotiate better price when the volumes are high, instead of buying for individual units its recommended to have central buying policy.
B. You can negotiate better price if you can put your entire annual consumptions to a vendor and ask him for annual rate contracts.
Bulk buying should be supported by bulk handling and storage system.
Get more ideas by visiting http://www.shumaonline.com/
About Author :
Im mechanical engineer by qualification and have graduated from REC bhopal . Worked in different capacities in manufacturing units .
