Improve Your Ability to Manage Costs

PROBLEMS calling for better management of costs:

  • Growth in overhead costs

  • Low Returns on Investment compared to industry competitors

  • Stagnant or falling margins despite growth in the business

  • Lagging investment in new technologies

  • Slow adoption of new approaches to managing functional costs

  • Inability to keep pace with product improvements for customers

SOLUTION: More Effective Management of Unit Costs
  • Benchmark the cost structures of your
    best competitors

    • Financial gap: How much must you reduce cost to match them?

    • Rates and management approaches: Are they managing costs fundamentally differently?

    • Customer mix: Would a change in customers reduce your costs?

  • Develop
    your own
    unique approaches to cost management

    • Typical costs: What costs does the typical business incur?

    • Cost Productivity: How do you measure cost productivity easily and practically?

    • Economies of Scale: Are unit costs declining over time?

    • Techniques: Can you use one or more of the four basic techniques to reduce costs?

<<Return to Manage the Cost Structure to Reduce Unit Costs