Cost management haghpanah-2015

Costs Reduction methods
Pejman Haghpanah
October 2015
P.Haghpanah@kas-msp.com

Pejman Haghpanah
Education:
B.A. of Industrial Engineering
M.A. of Technology management
Experience:
Assessor of EUROPEAN HR LEADERSHIP AWARD in Iran
Assessor of Iran National Award of Human Resources Empowerment
Assessor of Iran national award of technology and innovation management
Lead auditor in TUV NORD IRAN (ISO 10015, ISO 10001, 10002, 10003, 10004)
Responsible for develop and train the training courses of changes of ISO 9001:2015, CRM,
ISO 10001, ISO 10002, ISO 10003, ISO 10004 (CSM), ISO 10015, and Training management
systems in TÜV Academy IRAN-GEMANY branch and IMS requirements, ISO
9001:2008 Internal Auditor, and other management training courses such as:
Strategy management, Performance management, Knowledge management,
New approach of business continuity, Train the trainer, Product management,
Marketing and Sales strategy management, Risk Assessment methods, Costs
reduction methods in Amirkabir University of Technology, Tehran University, Iran
Association of Industrial Quality Control Managers and other management
academies in Iran.
Costs Reduction methods

Costs reduction methods
3P.Haghpanah@kas-msp.com
Content
Competitiveness and importance of cost
 Role of costs in Porter’s Five Forces Model
 Types of cost
 Objectives, activities and processes base on costs reduction
 Cost reduction of:
 Organization structure
 Marketing, Sales and After sales
 Human Resources
 Purchasing
 Production and service providing
 Maintenance
 storage

Competitiveness
Quality
Price/Cost
Delivery Time
Organization Competitiveness
P.Haghpanah@kas-msp.com 4

Michael Eugene Porter
Role of costs in Porter’s Five Forces Model
5
Cost reduction
Increase of cost

Cost
Organization
Structure
Marketing,
Sales, After
sales
Human
Resources
Suppling &
Purchasing
Provide
Product &
Service
Maintenance
Storage
Types of Cost

Mission
Policies
Objective & Targets
Planning
Determine new Objectives
Analysis of Processes
Processes
Objectives, activities and processes based on costs reduction

Cost of
Organization
Structure
Develop the matrix
organization structure
Reorganize the
organization structure
Reorganize the Job
description
(See HR Segment)
Cost reduction of Organization structure

Cost of
Marketing,
Sales, After
Sales
After sales
(Warranty,
Guaranty,
Packaging Promotion
Branding
Cost reduction of Marketing, Sales and After sales

Cost reduction of Marketing, Sales and After sales

Cost reduction of Human
Resources
Job
Organization
Trends of
employment
Multi-
purpose
Human
resources
Change
full time to
part time
employee
Out sourcing
Performance-
based pay
Dismiss
Task bonus
Organization
Rewards
Cost reduction of Human Resources

Job Competency
standardization
Education &
Experiences
SkillsTraining
Cost reduction of Human Resources – Job Organization
Reduction of:
 Time & cost of staffing and employment
 Time of probationary period
 Time & cost of training
 Cost of performance errors

Cost reduction of Human Resources – Skills development

Cost reduction of Human Resources – Out Sourcing
 Design, develop & maintenance of website
 Maintenance of IT network
 Research and development and innovation
 Design, engineering and technical documentation
 Design and production of production devices & tools
 Assembling

Cost reduction of Human Resources – Performance (KPI) based pay
Develop KPI (Key Performance Indicators)
 Marketing, sales and after sales
 Design & Development
 Purchasing
 Production
 Service provision
 Quality control
 And other processes

Cost reduction of Suppling & Purchasing
 Definition new suppliers
 Determination priority of purchasing
 Purchasing budgeting based on
marketing and sales forecasting
 Control of financial liquidity
 Control of claim collection
 Cost reduction of material and products
handling
 Develop the supply chain

Cost element
Material
Wages
Overhead
cost
Cost reduction of Production and service providing
Cost reduction of:
 Depreciation
 Rent & Leasing
 Licenses
 Assurance
 Wastage & duplication
 Energy

Objectives of work study:
 Methods development
 Layout development
 Fatigue and errors reduction
 Quality level development
 Effective & effectiveness of resources usage
 Material handling improvement
 Risk level & incident reduction

 Cost of Quality
 Prevention cost
 Appraisal cost
 Failure cost
 Internal failure
 External failure

 Development a maintenance planning
system
 Analysis of inactivity
 Preventive of inactivity and repairs
 Determination point order for
maintenance and repair’s equipment
 Time reduction of inactivity and repairs
 Usage devices and equipment by long
term life-cycles
‫هزینه‬
‫و‬ ‫نگهداری‬
‫تعمیرات‬
Reset up
Components
and supplies
Repairs
Inactivity
Cost reduction of Maintenance

Daily Plan
Weekly
Plan
Monthly
Plan
Quarterly
Plan
Six
monthly
Plan
Yearly
Plan
Preventive Maintenance
Cost reduction of Maintenance

 Correct sales forecasting
 Determination of BOM (Bill of material)
 Integrated of production planning, inventory
planning and purchase order
 Determination point of purchase
 Time estimation of material and semi-finished
goods providing
Cost of
Storage
Materials
Semi-
finished
goods
Product
Wastage
Cost reduction of Storage

Cost management haghpanah-2015

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