COST OPTIMIZATION

Description

Decreasing Operating Cost is a constant necessity for all businesses, especially since the pressure of competition no longer allows companies the luxury of dealing only with costly wasteful practices, but compels them to take immediate action to improve performance in each and every area of activity. All costs must be reviewed as to the extent to which they are necessary and yield benefits for the company. At the same time, profit loss areas should be identified, as certain costs, necessary though they may be under current operating conditions, can be easily eliminated, if processes are reorganised using modern tools. Although, normally Cost Cutting in a business should be part of an overall Strategic Planning process within the framework of an integrated Business Plan, it can nevertheless be implemented as an independent In-company Organisation Project within a global Cost Cutting Programme targeting all corporate activities.

Course Content

Α. THE COMPANY’S COSTS

Budget structure
Basic cost approaches
Activity Based Costing

Β. AREAS OF WASTE OF RESOURCES

Secretariat Operation – File Management
Purchases – Supplies
Product – Services Design
Production Wastage – Product Quality
Plant Planning and Production Technology – Maintenance
Labour Cost – Personnel Management * General Expenses (Cost of Vehicles – Energy – Telephones)
Administrative Expenses – Office Work – “The Paper Reign” – Security
Sales Expenses – Transportation – Distribution
Product Returns
Forwarding– Promotion – Advertisement – Expenses
Warehouse Operation – Supplies
inancial Operations – Accounting – Loans – Working Capital
Information technology – Senior Management

Fixed Assets Investments – Changes – Innovations

C. COST CUTTING TOOLS & METHODOLOGIES

A 300-point list for cost reduction
Budget – Break-even Point Analysis
Selection of Financing solutions
Stock Reduction Techniques
Process Improvement Techniques
Programming and Production Batches
Outsourcing – Teleconferencing Tools
Specialised, Tools with practical applications:

– Value Analysis -Cause and Effects
– Brainstorming
– Pareto Analysis
– Statistical Process Control (SPC)
– Time and Method Studies
– Linear Programming
– NPV, PBP, ROI
– The Process approach in cost reduction
– Control of Budgeted Expenses and Cash Flow through Excel spreadsheets
– Forms and Software Support for cost reduction

D. COST REDUCTION AS A PROJECT

Designing a Cost Reduction Program
Determining critical points in Cost Reduction Projects
The role of Personnel – Administrative Support

General Managers & Senior Executives
Managers / Heads of Production, Financial Services, Purchasing, Marketing, Human Resources

This seminar is aimed at providing participating business and organisation executives with cost-cutting essentials – both theoretical and practical – that will allow them to:

Identify the areas of activity where drastic operational cost reduction is required.
Organise and implement cost reduction as an Operating Project with measurable results.

Seminars material includes:

“Cost Cutting” manual including Case Studies and solutions (hardcopy)
Complete seminar presentation
Critical Point Management Software for Cost-cutting Projects
Excel spreadsheets for Discount Evaluation, ABC Analysis and Control of Budget Expenses
Free consultancy services on the seminar topic, for an entire year, available trough our website

Nicholas J. Michaloliakos

Chem. Eng., top manager in large international companies for 20 years, Managing Director of Advanced Quality Services Ltd, a management consulting company specialising in strategy that has participated in more than 300 integrated reengineering projects.