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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?

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