Dinesh Divekar
Business Mentor, Consultant And Trainer
Asst Manager Adminstration

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I am working in a machine tool company with a post of Office Administrator and now a days when you all knows the market scenario company is asking to do "COST CUTTING" we are into a service related business and our monthly bills for courier is near to 1.5K and their is no record maintained in any of the department to track which material is how much weight. Now for the last month we have maintained the register in which we are writing weight with respect to the box/packet which is dispatched but when the courier bill comes he told that the weight which you are mentioned in your register is never matched with my weight because i am considering the weight / dimension also and according to this i am charging the rates.

MNow my question is how can we track all those things ??? secondly some of the employees are not contributing in this task as they might not want to do this type of cost cutting. Sir, please share your views so that i can take this initiative with the help of your valuable views / suggestions.

Dear Mohit,

If you are from Machine Tools company then courier bill of Rs 1.5K per month is not that great amount. Nevertheless, we should strive to save every Rupee. To do this, you may keep a register with the Front Office Assistant (FOA) of your company. As and when a courier is received for despatch, she may enter the details of the courier in this register.

Courier companies measure the weight as well as volumetric and consider which ever is higher. Volumetric weight is calculated as:

(Length x Breadth x Height of the package) / 6000

FOA can calculate both the weights.

Lastly, about cost cutting. In the course of the operations, your company would be incurring the following costs:

a) Inventory Carrying Cost of Raw Materials

b) Work in Progress (WIP) Inventory Costs

c) Inventory Carrying Cost of Finished Goods

d) Capital costs to run the operations

e) Capacity costs

f) Maintenance costs

g) Quality costs

h) Inspection costs

i) Ordering costs

What efforts your company is making to reduce the above costs? Far from reducing, has your company measured the costs scientifically? If not I recommend you concentrating on measurement and then reduction of the above costs. Rs 1.5K is too minuscule amount to be bothered about.


Dinesh Divekar

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