OUR THOUGHTS ON:

Manufacturers Looking for Ways to Reduce Expenses

Manufacturing

By Mark Sarver

Manufacturers across the world are constantly looking for ways to reduce expenses and ultimately increase the bottom line. Some companies have eliminated unnecessary positions within the organization while others have employed conscientious cost-cutting.

A strategy some larger corporations have revisited in recent years when trying to decrease costs is the zero-based mindset. While companies typically look to historical data and past events in establishing budgets for the upcoming year, zero-based mindset forces management to start at zero and justify all expenses flowing through the organization to prevent budget items from being pushed blindly through the process.

Zero-based mindset allows companies to increase internal accountability by examining cost elements of the organization on a granular level. This, in turn, could help companies lower variable costs within their supply chain process and effectively achieve the cost-cutting approach so many seek.

There may be no failsafe solution when looking to reduce costs for your organization, but adopting a zero-based approach for examining budgets and supply chain processes could be a step in the right direction. For more information on how to reduce expenses for your manufacturing company, contact us. 

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