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Supply Chain Cost Reduction in India
- Supply Chain Cost Reduction opportunities for Indian Companies
The Market and Supply Chain Need
Failed companies. Rescued banks. Panicked markets. Our current economic suffering is being hailed as one of the worst of all times. With a sharp decline in spending & wealth, now more than ever, have organizations realized the need for strategic thought and structured planning. This is where cost reduction has assumed its insurmountable position.
Cost saving initiatives need to be shaped and implemented by all departments in the organization; the entire process of planning, monitoring and measuring needs the support of all. Everyone from the top to the bottom must be actively involved, and work towards the new goals set. Expense reports are obviously the most logical place to start. These should be over a relatively long period of time in order to remove any seasonal variations. It is also important to stay focused on the key areas that account for the major 80% of costs.
Many organizations believe in myths like an “informal program for cost reduction is fine”; or even that reducing costs have a negative impact on quality. Nothing could be further from the truth. The most efficient cost reduction programs are those that very formal / specific and have clear objectives & accountabilities attached to it.
Companies that have been successful in cost reduction realised that it’s not enough to just reduce expenses to remain competitive; rather it takes innovative measures to emerge as leaders. This is why the role of knowledge advisory groups is so important. They help provide a much needed innovative & structured program, designed through practice-proven tools and strategies from specialists.
For example, it is easy to see why so many companies choose to downsize their workforce so that employee costs, which often account for more t
Last Updated On:7/4/2011 5:43:49 PM
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