Cost Reduction Information Request

Hi all,

I would appreciate any suggestions (books, web sites, best practices articles etc...) on cost reduction in manufacturing industries (mid to large sized companies). Where do we need to start ?

In my case, I guess we need to establish a cost reduction strategy as a first step. The staff believe they have already done everything possible on cost reduction and they have already reached at the limits. So there is a brick wall ahead.

That's all the information that I can provide at the moment. Thanks in advance for any insights and comments.

Best Regards,
JN. B

Re: Cost Reduction Info Request

Biiiiiiig Issue !

"Lean" is in fashion... "lean production", "lean procurement" etc.... try googling these terms for a start.

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Re: Cost Reduction Info Request

JN B, have you looked into yield improvement, lean operations, alternative suppliers who can offer at reduced price etc ?

Re: Cost Reduction Info Request

JNB2005 said:

In my case, I guess we need to establish a cost reduction strategy as a first step. The staff believe they have already done everything possible on cost reduction and they have already reached at the limits. So there is a brick wall ahead.

Click to expand...

Benchmarking or comparing yourself with 'Best in Class' on all the cost intensive aspects could be a better option in this situation. If others can do, why can't you do under the similar circumstances ?

A Google Search can also provide you with lots of Cost reduction tips in your area of operation.

Re: Cost Reduction Info Request

One of the first thing that one should do is to understand your 'cost'. What are the various components and its contribution to the overall cost (%). What are fixed and what are variable.

These information will help you to zero-in into the relevant areas with the help of tools like 'lean' (waste reduction + increased efficiency).

JNB2005 said:

<snip>The staff believe they have already done everything possible on cost reduction and they have already reached at the limits. So there is a brick wall ahead.

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I can imagine! Getting folks out of their comfort zones is a often a painful process. The ideas offered by the Cove Members are excellent. Where in the various processes is non-value added work performed? And by the way, don't beat up on your suppliers, they probably have already made significant concessions...:mg:

Stijloor.

here you can find some useful information and case studies on cost reduction & other business management related issues.

Thank you all for the valuable information that you provided.

Best Regards,
JNB

Hi !


I know (and I think we all do) that the LEAN, Kaizen & Toyota Way approach are in fashion now and that they are good theories. But, if you want a fast result, you should focus more on the practical kazen and so on.

Further more, you should try and select the best tools/models from this and apply and emulate them to your situation. Not everything is lean or what's lean for me isn't lean for you. Best ex. is with the production lines - and I shaped one is lean for a 2 WRHs plant, but for a 1 WRH plant more lean is an U shaped one.

Also, meetings with the people to make them aware of the importance of improving for cost reductions - no threts, no finger pointing, no pressure - but awareness. One key guy here is the supervisor - and make of him not a chef above, but the always support behind the front line of production - the operators/workers.

The next step should be monitoring, analyzis and action/decission meetings focused on the most important cost-raising topics: scrap, trainings, FPY, OEE, CHOs optimizations, quality mindset.

Re: Cost Reduction Info Request

harry said:

One of the first thing that one should do is to understand your 'cost'. What are the various components and its contribution to the overall cost (%). What are fixed and what are variable.

These information will help you to zero-in into the relevant areas with the help of tools like 'lean' (waste reduction + increased efficiency).

Click to expand...

Absolutely! Harry has the best "starting point" you can use. Figure out what is fixed and what is variable. Another thing that works well is to involve people below the supervisory level, you might be surprised just how much these folks know about where the waste is.