February 23, 2024
Dear Readers and Viewers,
According to the business scenario, cost reduction is one of the most important activities from the outset, vitally contributing to all business activity sectors and manufacturing industries, and ultimately on the path to satisfying all customer classes worldwide in order to sustain a place in the highly competitive market by continuously introducing improved or new strategies and different techniques.
The total manufacturing or product cost of any finished product is the sum of the actual cost derived for every single activity that is practically carried out or required to convert the raw material into a finished product until it reaches the supply end in the safest and most secure manner.
Product cost reduction is the strategy of reducing the total manufacturing cost of a product without affecting its quality in any aspect. It actually starts with the origin of the production of raw materials and ends with the conversion of raw materials into finished products, to the maximum possible extent, at regular intervals.
Product cost reduction is a crucial strategy that needs to be applied promptly, consistently, without fail, and with the utmost priority in every manufacturing industry. This is because even a small reduction in costs will eventually reflect the market, resource usage, and status of the global economy.
Product cost reduction is a strategy that can be almost successfully carried out in several ways or methods, all of which are grouped under two account heads, PCRMA (Product Cost Reduction through Managerial Activities) and PCRTA (Product Cost Reduction through Technical Activities), and operate under two different heads of departments in parallel.
Effective managerial practices, including additional research, estimation, evaluation, source identification, purchasing, hiring, training, controlling various expenses, selling, mode of transportation, insurance, and so on, can reduce the cost of a product over a given period of time.
Similarly, product cost reduction can also be achieved significantly through the attempt to introduce efficient technical activities such as deep analysis, study, comparison with previous data, introduction of improved versions of methods and processes, introducing hi-tech facilities, training programs, etcetera. Generally, the ultimate results (by values) obtained by the product cost reduction through technical activities will be much higher than the results due to the reduction through managerial activities since the involvement of technical activities is greater.
The cost reduction related to any sort of activity, such as office activities, administration activities, service activities, business activities, and manufacturing activities, is highly feasible by giving the assignment to different experts in the same field at regular intervals. At the outset, to achieve cost reduction, it is important to identify the managerial and technical activities to be executed in advance and ensure key certainties such as budget, period, net benefits, etcetera.
With pleasure, I announce that I possess over 50 years of experience in various business and manufacturing domains, with a focus on cost containment. I am more confident in my ability to achieve further cost reduction in every sector to any extent based on the valuable inquiries from any part of the world.
SUMMARY
According to the well-known adage, “small drops of water make a mighty ocean,” we can easily accomplish the goal of cost reduction if we remind ourselves of every action we take before it begins, during the processing phase, or at least when the task is completed.
No one should decide that there are nil chances for further cost reduction since it is infinite and varies from time to time and from person to person.
Since a positive outcome will be obtained from a different perspective, it is crucial that the cost reduction activity not be continued with the same team of people who were involved in the previous attempt.
So that cost reduction can be done everywhere, to any extent that is feasible.
