Management Commitment: Critical for Successful Cost Reduction
Like all management initiatives at the corporate level, cost improvement requires the commitment of management. Not just in the setting of targets and being present at the kick-off meeting, but more importantly to make it part of the business strategy, to be visibly involved and critically providing political cover to those implementing this policy.
Low Hanging Fruit Doesn’t Necessarily Help
Cost Improvement Targets must excite the imagination and commitment of the organization. They should not only require the commitment of everyone, but also their participation, in order to be achieved. Targets need to be challenging and ambitious driving towards a common …
Financial Transparency: Critical to Successful Cost Improvement
In order to ensure the success of a cost improvement program, it is critical that the quality of financial data being used to establish the targets and measure the successes is available, consistent and accurate. In global businesses, this can be …
Securing Financial Results
As we come towards the last quarter of the year, many managers are thinking about achieving the year-end results or even putting the final touches to next years budget. For many it is a challenge to achieve the targets set …
Turbo Charge your Cost Savings Manager
In the current economic climate many companies or organizations have taken the progressive step of installing a cost reduction tsar, whose task is to take a hard look at the organization’s cost base and identify / implement measures to achieve a target set by management….
Cost Improvement or Cost Reduction
Most of us do not differentiate between COST REDUCTION and COST IMPROVEMENT. These are two commonly interchangeable terms. But they are completely different activities. COST REDUCTION is an activity driven by a change in the business environment. Often initiated by management …
Budgeting is Simply Not Enough
One of the most time consuming processes in the industrial organization is probably the budgeting process. Some organizations do simple budgeting by taking last years expenditures and adding or subtracting deltas according to factors such as sales, inflation, and required investment etc. Many companies on the other hand build budgets department by department, line-item by line-item from scratch (ground-up or zero based), following a set of preset criteria or assumptions.
Employee Awareness: Critical to Successful Cost Improvement
Implementing a cost improvement program can be straight forward, as long as one focuses on the program objective and remembers a few golden rules. One key rule is the appropriate communication of the program objectives to staff and employees.