Most organisations accept without question the principle that costs should be kept as low as possible provided they don’t put key corporate objectives at risk. In practice, organisations often face strong pressure to increase resources to meet objectives such as better customer service and product quality.
Reducing costs is often problematic because it’s not clear exactly what is being done, or what value it contributes to the organisation, in the areas where you seek savings.
This course examines six ways of overcoming these problems: improving the ability of spending areas to contribute to key corporate objectives and customer needs, while reducing their costs significantly.
On completion of this course, you will gain an understanding of:
- the six techniques for reducing costs in an organisation
- how to assess the applicability of each technique to their circumstances
- which resources are important in terms of achieving strategic goals and should be carefully preserved and enhanced, and those that are less important and might therefore be better candidates for cost reduction
- how you can reassess the management structure of the organisation in a way that provides for the right number and level of management posts to give effective management at lowest management cost
- how activity analysis can be used to: bring clarity about what people do in the organisation; identify cost reduction opportunities that would otherwise remain hidden; stimulate cost reduction ideas that would otherwise be missed
- the importance of purchasing effectively as a potential cost reduction opportunity, and of benchmarking as a means of identifying world class performers who can be emulated
- how reducing both fixed assets and working capital can play a part in reducing the costs of the organisation.