Wednesday, March 26, 2008

Cost Reduction


My toolshed contains ways to save money. We analyze cost drivers and exploit them to improve the bottom line.


Cost drivers, from Michael Porter’s work, are listed:
Knowledge
o Discretionary Policy
§ Wages
§ Technology
§ Mix
§ Service level
§ Material specifications
§ HR policies


o Learning
§ Plant layout
§ Schedule improvement
§ Labor efficiency
§ Design changes
§ Increased yield
§ Increased utilization
§ Tailoring raw materials
· Relationships


o Linkages
§ Internal
· Optimize
· Coordinate
· Inventory
§ External
· Channels


o Interrelationships
§ Share savings


o Integration
§ Reduce cost
§ Increase market power
· Macro Issues
o Location
o Institutional factors
o Timing (first to market, mover?)
· Volume
o Scale
o Utilization patterns

1 comment:

Alan S Michaels said...

Bob,

I greatly applaud your highlighting the work of Michael Porter. If he had a fan club, I would join it. Short of that, I like to network with others who leverage Porter's ideas.

Cheers,
Alan S. Michaels
Co-founder
www.eCompetitors.com