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Reducing Costs Business
- 1. Reducing Costs in your business 25 April 2012
- 2. Welcome ‘The price of inaction is far greater than the cost of making a mistake. ’ Meister Eckhart 1305
- 3. It’s popular Have you been through a Cost Reduction programme in the last 3 years? Yes No Don't Know Source Deloitte
- 4. Strategy vs Tactics “Imagination rules the world” Napoleon Bonaparte
- 7. Chase the big numbers
- 8. Cut waste and inefficiency, not investment
- 9. Techniques for Cutting Waste & Inefficiency Six Sigma Continuous Improvement Kaizen Just in Time Statistical Process Control Total Quality Management Business Process Re-Engineering Trillium ISO 9000
- 10. Involve your Employees Analysis and Planning
- 11. ?
- 12. Employment law – stay out of court
- 13. Managing Suppliers • Search the globe • Re-negotiate
- 16. But I’m in a hurry…..
- 17. What we plant in the soil of contemplation, we shall reap in the harvest of action. Meister Eckhart 1307
- 18. Recap and Process •Review Strategy •Analyse and plan •Watch the Technology •Chase the big numbers •Cut waste and inefficiency, not investment •Involve employees •Stay out of court •Manage Suppliers •Stop doing things •Make it a way of life
- 19. Conclusion •Do Less •Do what remains more efficiently •Pay less for what you buy
Notas del editor
- IntroThanks for comingI am – ProsperoCost Redn is something often asked about.My backgrnd Questions. Prizes for good questionsBegin with monkAssuming business owners or advising business ownersStraw poll
- 65 23 12It’s disruptive If you have to keep repeating it, perhaps you’re not doing it right
- Strategy – customers & competitionMassive trend for manufacturing to ChinaPeak manuf 2007People businessProperty businessOne client. 12 bus lines – now 5Lots of great quotes from NB ‘Never ascribe to malice that which can be explained by incompetence’1812
- None of it works without careful a & pNeed a good FDGKN Case. Expensive redundancies counter productive
- Strategy must take account of technology. Firstly, you’ve got to think about how changing tech can wipe out your business model. Eg road atlases, travel agentsHow many passengers? 75m2nd Using tech can radically reduce costs. Eg low cost airlinesDramatic tech change. Eg logmeinClive
- You’re never going to save a business by cutting down on use of envelopesCost of sales, direct costs, purchases, payroll are the biggest spends Symbolic value of stationery Nazi
- Marketing, training, prod devel are easiest to cut, but harm the business.Always want to get value for money from these. As Fd, always struggle to see payoffsOther than changing strategy, there’s only one way to cut core costsCosts adding value v waste. Scrap, downtime, non-chargeable hours, obsolete stock.Look internally, in detail, involving empls, making lots of small stepsGet help. Toyota, Harley D taken millions out of costs while improving prod quality.Also works in office environments
- Continuous process improvement, lots of tiny steps. Tiresome and common sense, but effective.Egs Electronics packaging Shared servicesDetermine you’re going to do it. Announce, involve. Set up teams. Give resources – time and money. List & analyse problems. Choose ones to tackle. Eliminate problems. Go round again. 80/20.Not a quick fix. Requires persistence. Must be customer driven.
- 2 reasonsMorale107 people
- Establish genuine needSet out fair selection criteria. In reality…Consult with all of those affected – more formal if > 20 employeesRights to stat redund pay if employed > 2 yrsIf any of this isn’t done right, you can end up at a tribunal.Get advice
- Activities that don’t add value. Pointless meetings, unread reports. Don’t cost much but opportunity to save cost and time.Electrical Wholesaler. Mgmt report was 96 pages. At some point, someone had said ‘I’d like to see’…
- GE. Sack 5% each year.3 responses Meek surrenderFightbackCareless axemenName the characterAn effective business Stringer’s crime empire
- If you have to cut in a hurry, all you can really go at are the investment type costs. R&D, marketing, training, capex.You’d heard me say that you should cut waste not investment. Contradiction? Not really – a qu of pace. You should always be looking to run at lower cost. Then you won’t get into crises.How can I do this. Cash is always tight. Need good finance mgr.Beijing Gold Medals 19
- Probably noticed I don’t like bullets on charts, but sometimes they are useful
- Right down to 3 pointsVery quick canter through