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