From the course: Cost Reduction Tips - How To Cut Costs And Maximize Profits
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Identify your main areas
From the course: Cost Reduction Tips - How To Cut Costs And Maximize Profits
Identify your main areas
- So you've got to reduce costs. What do you do? And the first thing is you've got to identify the main areas where you can get potential savings. People are going to be one area for sure. People are often the biggest cost in organizations, and they're always a significant cost. But it might also be materials, and that might be consumables, it might be bought-in subassemblies. So if you're buying in subassemblies, they can be really expensive. And it might be sub contractors' time as well, so sub contractors count as a cost. And, of course, power is another variable cost that people have. Can you save power? Then there are fixed costs like, for example, buildings. And the word fixed costs implies you can't do anything about it, but clearly if you could save space you might be able to sell off a building or not have to rent it. So saving on buildings would be a cost saving. Now how would you work out which of these are your biggest costs, and I would say you can get this from looking…
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