What does a company have to do to be able to reduce costs and increase efficiency?

Large manufacturing industries are also made up of many manufacturing units, departments and plants. The cost of each factory division consists of fixed and variable costs. Variable costs are determined by direct materials, energy consumption and sales commissions. Fixed costs consist of depreciation, overhead, and research and development costs. In this way, we can look at the problem in a simple way. Fixed costs are determined by capacity utilization and production and sales rates. Capacity utilization, the determining factor is the bottleneck process in your factory, the bottleneck determines the output of the system. So by increasing the capacity of the bottleneck, you can increase the overall capacity and reduce the fixed cost by a huge proportion and a huge space. According to our practice and research, 90% of factories have 10-30% capacity waste. So there is room for 10-30% profit growth. For variable costs, most of them are determined by the market, the company has less room for change, but compression is not impossible. It mainly lies in the improvement of production process, quality, staff efficiency, equipment performance and tooling efficiency. However, this requires some skill, experience and ability. So for this kind of saving, it is recommended to refer to Toyota and Foxconn's practice of implementing a continuous improvement system for all employees in the company. That is, through institutionalization, encouragement and protection, all improvement activists can participate in the company's cost reduction and efficiency. Each completed item is rewarded with corresponding economic and spiritual values, and is also linked to the regular assessment and promotion of each position. In particular, a culture of improvement is established, which is explained in one sentence:Never blame the problem, always improve and innovate! If you want to learn how to promote continuous improvement, you are welcome to search for my previous articles. The above suggestions are for your reference!

The following information is reproduced for reference. How can enterprises reduce costs?1. To reduce costs through modern management, it is necessary to grasp the key points of management. Enterprises should combine the cost target management and economic responsibility system, strengthen cost accounting, strengthen the production, supply, marketing and financial management of each link, and refine each item of raw materials, auxiliary materials, fuel, power, wages, manufacturing costs, management costs. In the production cost is transformed into unit product cost, so that cost accounting can enter the workshop, into the team, to the head. Static control into dynamic control, the formation of full staff, the whole process, all-round cost control pattern, so that cost reduction is implemented into the specific actions of each employee. On this basis, the first step is to strengthen the supply management and control the cost of materials. Enterprises should formulate the procurement of raw materials to control the price of the catalog, the implementation of the method of procurement than the price, comparison of goods, the best of the best, to achieve the same quality to buy a low price, the same price near the purchase, the same price with domestic, not imported, to achieve the purpose of reducing costs. The second is to strengthen material management, reduce material and chemical labor consumption. The level of material reserves and consumption directly affects the rise and fall of product costs. Therefore, the enterprises from the development of material consumption quota to the issuance of materials should be strictly controlled, on raw materials and other kinds of material consumables to implement the quota classification management, in the order quantity and inventory reserves to implement key control, in accordance with the applicability, timeliness, completeness and economy of the principle of the use of the plan issued, and with the financial income and expenditure plan and the combination of the order contract, into the economic responsibility system assessment. Various consumption affecting the cost of systematic control and target management, to prevent all kinds of unnecessary waste, to achieve reasonable storage and use of materials, reduce costs, improve efficiency, both to ensure that the reasonable needs of production, but also to reduce the occupation of funds; Third, to strengthen the marketing management and reduce the cost of sales. To enhance the legal awareness of sales staff and strengthen sales management combined. Before each sales business occurs, we should carefully investigate and approve the customer's business situation and affordability. Do not rush to ship, and do not engage in "emotional transactions", "gentleman's agreement", so as not to cause unnecessary economic losses. Not only to save business staff salaries, bonuses, travel expenses, subsidies, operating expenses, fees, short-distance transportation costs, transit links and other costs. Fourth, we should strengthen fund management, control expenditure and save costs. Enterprises should establish a sound financial supervision system, set up an in-plant bank, through the implementation of simulated market accounting, reduce costs, control expenses, improve economic efficiency, to avoid the use of funds due to the use of funds without a plan, expenditure is not standardized, multiple approvals, the loss of funds is serious and other issues, resulting in the use of funds in the use of the practice of disregarding the cost. Strictly strengthen the control of funds, so that all employees can feel the pressure of market competition, and change from a few bookkeeping to everyone's financial management. In particular, it is necessary to strengthen the accounting of administrative costs and some operational costs, including management. In this regard, according to the different nature of the work undertaken to calculate the cost of each head of the cost base for control and assessment, each pencil and manuscript paper should be paid from the contract amount.2. Reduce costs through technological transformation In recent years, the rising prices of raw materials and energy prices have a great impact on the rise in costs. In the presence of these unfavorable factors, how to reduce costs and improve efficiency? Enterprises must establish the idea that technological transformation is an important way to reduce costs. Through technological transformation, you can use new technologies, new processes, new materials, improve the technical content of products, open up ways to reduce production costs. First, we should grasp the technical transformation, actively adopt the new technology and new technology of energy saving and consumption reduction, fundamentally reduce the consumption of raw materials, and ensure the realization of the cost control target while achieving the target of product quality; secondly, in the implementation of technological transformation projects, we should pay attention to the reduction of the project construction cost, and obtain more returns with less investment. On the one hand, we should adopt short, flat and fast technical transformation; on the other hand, we should adopt unconventional infrastructure management and technical transformation. The timing of the project should be selected, the project should be accurate, and the implementation should be fast. Under the premise of guaranteeing quality, we should do everything possible to speed up the technical transformation project, reduce the project construction cost, and strive for early recovery of investment.3. Reducing cost by deepening reform, constantly mobilizing the labor enthusiasm of employees, improving the quality of employees, and establishing a lean and efficient operation mechanism adapted to the market economy are also important contents of deepening the reform of the enterprise to reduce the cost. All enterprises should take deepening reform as an important task to reduce costs and increase efficiency. First of all, we should reform the personnel system, break the boundaries of cadres and workers, reflecting the "willing to do, able to do, good" principle of employment, the implementation of recruitment and appointment system combined with the personnel system, optimize the combination of labor, competition for posts, the survival of the fittest, to achieve the "competent, mediocre" purpose, so as to mobilize the enthusiasm of cadres and workers, so as to mobilize the enthusiasm of cadres and workers. The purpose is to mobilize the enthusiasm of cadres and workers, improve labor productivity, enhance the sense of responsibility and crisis of the cadres and workers, and mobilize the enthusiasm of the whole staff. Secondly, on the basis of scientifically determining the amount of labor necessary to ensure the optimal cost target, the labor organization is improved accordingly, the labor capacity is approved, and the internal distribution system is reformed, so as to reduce the consumption caused by excessive unproductive personnel, labor shortage, and underutilization of labor. Within each enterprise, according to the nature of the work of each department and workshop, the complexity of process conditions, labor intensity, working environment and other factors, respectively, to take the appropriate form of distribution, tilted to the hard, dirty, exhausting, dangerous, high-skilled positions, in order to stimulate the labor enthusiasm of workers, increase the effective working time, reduce the labor consumption of each unit of product and the cost of wages, according to the needs of production and business entities to streamline and merge the Functional departments, the principle of lean and efficient management personnel. 4. There is a close relationship between product quality and product costs. In a competitive situation, whoever has high product quality will be competitive, and the product will have a market and will not take up too much capital. High product quality, no defective products or less defective products, can directly reduce production costs; if the product quality is high, can be sold at a higher price in accordance with the principle of high quality and good price, can relatively reduce the cost of the proportion of sales revenue; high product quality, winning bids and the loss of funds is serious, leading to the use of funds in the practice of not counting the cost. Strictly strengthen the control of funds, so that all employees can feel the pressure of market competition, from a few accounts to change to everyone's financial management. In particular, it is necessary to strengthen the accounting of management costs and some operational costs, including the administrative costs of the management, travel costs, office costs and other costs. In this regard, according to the different nature of the work undertaken to calculate the cost of each head of the cost base for the control and assessment of each pencil and manuscript paper should be paid from the contract amount.2. Reduce costs through technological transformation In recent years, the rising prices of raw materials and energy prices have a great impact on the rise in costs. In the presence of these unfavorable factors, how to reduce costs and improve efficiency? Enterprises must establish the idea that technological transformation is an important way to reduce costs. Through technological transformation, you can use new technologies, new processes, new materials, improve the technical content of products, open up ways to reduce production costs. First, we should grasp the technical transformation, actively adopt the new technology and new technology of energy saving and consumption reduction, fundamentally reduce the consumption of raw materials, and ensure the realization of the cost control target while achieving the target of product quality; secondly, in the implementation of technological transformation projects, we should pay attention to the reduction of the project construction cost, and obtain more returns with less investment. On the one hand, we should adopt short, flat and fast technical transformation; on the other hand, we should adopt unconventional infrastructure management and technical transformation. The timing of the project should be selected, the project should be accurate, and the implementation should be fast. Under the premise of guaranteeing quality, we should do everything possible to speed up the technical transformation project, reduce the project construction cost, and strive for early recovery of investment.3. Reducing cost by deepening reform, constantly mobilizing the labor enthusiasm of employees, improving the quality of employees, and establishing a lean and efficient operation mechanism adapted to the market economy are also important contents of deepening the reform of the enterprise to reduce the cost. All enterprises should take deepening reform as an important task to reduce costs and increase efficiency. First of all, we should reform the personnel system, break the boundaries of cadres and workers, reflecting the "willing to do, able to do, good" principle of employment, the implementation of recruitment and appointment system combined with the personnel system, optimize the combination of labor, competition for posts, the survival of the fittest, to achieve the "competent, mediocre" purpose, so as to mobilize the enthusiasm of cadres and workers, so as to mobilize the enthusiasm of cadres and workers. The purpose is to mobilize the enthusiasm of cadres and workers, improve labor productivity, enhance the sense of responsibility and crisis of the cadres and workers, and mobilize the enthusiasm of the whole staff. Secondly, on the basis of scientifically determining the amount of labor necessary to ensure the optimal cost target, the labor organization is improved accordingly, the labor capacity is approved, and the internal distribution system is reformed, so as to reduce the consumption caused by excessive unproductive personnel, labor shortage, and underutilization of labor. Within each enterprise, according to the nature of the work of each department and workshop, the complexity of process conditions, labor intensity, working environment and other factors, respectively, to take the appropriate form of distribution, tilted to the hard, dirty, exhausting, dangerous, high-skilled positions, in order to stimulate the labor enthusiasm of workers, increase the effective working time, reduce the labor consumption of each unit of product and the cost of wages, according to the needs of production and business entities to streamline and merge the Functional departments, the principle of lean and efficient management personnel. 4. There is a close relationship between product quality and product cost. In a competitive situation, whoever has high product quality will be competitive, and the product will have a market and will not take up too much capital. High product quality, no defective products or less defective products, can directly reduce production costs; if the product quality is high, according to the principle of high quality and good price, can be sold at a higher price, can relatively reduce the cost of the proportion of sales revenue; high quality products can win more users, and directly enhance sales, reduce the cost of goods sold; product quality is high in fact, saving energy and raw materials; high quality products can save manpower and management costs, will undoubtedly reduce costs. Therefore, enterprises should attach great importance to improving product quality and strictly control product quality by all means. First of all, to strengthen the leadership of quality management. Enterprise factory director (manager) to personally grasp the quality, the formation of quality management network, daily feedback quality information, quality analysis, quality cost control; Second, there should be strict process standards, supply, production, sales and other impact on product quality of the implementation of the systematic quality management of each link, so that does not meet the quality requirements of raw materials are not purchased into the plant, do not meet the quality requirements of semi-finished products do not flow into the next process, not qualified products do not leave the factory; Third, the quality of products is not qualified products; Third, the factory should be strengthened to improve the quality of raw materials. Third, to enrich the quality management force, improve the quality management system, the establishment of a full-time inspection team, the development of self-inspection, mutual inspection, inspection of the combination of quality inspection system and standards, strict product quality, while quality management into the economic responsibility system assessment, the implementation of high-quality price, good salary, good punishment, bad waste penalty pay the principle of distribution, strict punishment for various reasons affecting the quality of the product or the matter to enhance the quality awareness of the enterprise to improve product quality. Quality awareness, improve product quality; Fourth, carry out mass quality management group activities, planned and organized quality research. The quality problems affecting product quality and difficult to find for a while as the QC group's research topics are implemented to the workshop, team, to carry out mass QC group research activities, so that the mass QC group activities in the controlled state of organizational leadership, active topics, planning arrangements, checking and implementation, so as to improve product quality.5. Reduce costs through optimization of the structure. First, optimize the product structure. Whether the enterprise's products are welcomed by the market, whether it can occupy a certain share of the market, is the basic premise of reducing costs. If an enterprise's products can not be sold, resulting in backlog, far from reducing costs. Only a wide range of products and a reasonable product structure can meet the needs of consumers at different levels, have a stable market, reduce inventory and product capital consumption, and accelerate capital turnover. Only a reasonable product mix can accelerate product proliferation, the implementation of diversified operations, accelerate market penetration, increase relative market share, so as to achieve the purpose of reducing costs. Therefore, the enterprises must recognize the shortcomings in their own production and operation, carefully analyze and assess the situation, and timely change the production and management strategy, the market situation is not good, the product of a large amount of capital backlog of finished products to limit the transfer of production, the selected leading products through the use of advanced technology, improve the level of production mechanization and automation, and strengthen the production of command and control, and so on, to increase production. In order to reduce the product cost contained in the depreciation, interest and other fixed costs. At the same time, we should continue to innovate and optimize the product structure, adopt the strategy of "you don't have what you have, you have what you have, you have what you are good at, and you are good at what you are good at", increase the variety of colors, develop new products, track the world development trend, combine the needs of consumers in different regions and at different levels, form different product structures and gradually expand the product market. market. Secondly, optimize the capital structure. Under the situation of fierce market competition, enterprises should develop continuously to enhance the ability to participate in market competition and resist market risks. However, the development depends on big investment, and in the current situation of the whole market downturn, big investment will certainly bring a heavy burden to the enterprise. Therefore, enterprises should be through mergers, leasing and other forms, increase the flow of assets and restructuring, optimize the capital structure, capital expansion, so as to expand the scale of production, reduce costs, improve market share and competitiveness, to achieve cost reduction and increase production, increase sales and profits of the good results. To rely on large inputs, and in the current downturn of the entire market, large inputs will inevitably bring a heavy burden to the enterprise. Therefore, the enterprises should be through mergers, leasing and other forms, increase the flow of assets and restructuring, optimize the capital structure, to achieve capital expansion, so as to expand the scale of production, reduce costs, improve market share and competitiveness, to achieve good results in reducing costs and increasing production, increasing sales and profits.

The most important thing for the enterprise to reduce cost and increase efficiency is to rationalize the integration of human and financial resources and time. Remove the scum from the management team

First you need to understand your production process, then use the VE method to calculate the cost of each process, and then find out the cost loss points to determine the need for improvement. If so, take steps to improve and then follow the PDCA principle. Also, this is not something that can be solved by one person. If the top management of the company does not support it, it cannot be solved fundamentally. If you are interested, let's talk about it in detail.