Facing Financial Challenges Together: How Can We Cut Costs in Our Manufacturing Unit?

Dear All,

As we all are aware that entire world is facing financial crisis and we cannot escape our self from this wave as employee particular and KEL in general. We have attempted to draw the attention of all of us where we can proactively put cost cutting so that the impact of recession can be marginally avoided.

The areas where we can put cost cutting.

• • Usage of Stationery
  • Usage of Xerox machine
  • Control on usage of Electricity- Make habit to switch off AC and computer once you leave your seat.
  • Control on Wasting of food-Canteen
  • Usage of water
  • Usage of mobiles phones as well as landline facility
  • Conveyance-Traveling (Use shuttle in stead of hiring special auto where it is possible
  • Transportation – by reducing the frequency of tempo and loading rickshaw
  • Saving in raw material cost by size, by type by grade
  • Reduction in frequency of visits at suppliers/vendors end (For QC and purchase team)
  • Reduction in sub contacting of the parts and effective utilization of internal resources

Please give your inputs.

Regards,

Dev

Employees should be offered cutting tea to reduce the budget.

Employees should be reimbursed for public transport and encouraged to use public transport.

Employees should consume their leaves with no encashment for the next 12 months or accumulations.

Employees should be encouraged to eat a one-time meal at home in the evening with no free lunch/meal or subsidized lunch.

Employees should be asked to bring any remaining pale foodstuff overnight to be fried and served as breakfast in the office.

Employees should not use the intercom but communicate with gestures to reduce physical exertion.

Employees should be encouraged to keep fast for three days a week.

Employees must be encouraged to go to bed early to save electricity.

No use of air conditioning/fan in the office, use hand-driven fans instead.

The office should be shifted to an open space for free natural light and air, as it is good for health.

No telephone communication, only use chatting for outdoor communication.

No peons allowed; every employee shall manage his/her files and movement of files themselves.

Executives shall not be eligible for formal attire; instead of coat and suit, they should be given raincoats.

Staff employees should wear a half uniform - shorts and Barbuda, etc.

Dear Mr. Dev,

In the last three interventions you proposed for cost-cutting, I do not agree with them because you are compromising on quality. While all the other options are acceptable, you should consider displaying banners and slogans at your place, which can introduce some changes in the behavior of people working there.

Thanks

Dear Mahendra,

Let me share the thoughts of one of the directors of my earlier company. He says cost-cutting does not mean cutting down the salaries of office boys/admin assistants and doing silly things.

He says cost-cutting initiatives should start from the top level by reducing the number of air travels, encouraging video conferences, and reconsidering allowances such as providing cars to directors and their maintenance, along with other activities that incur significant expenditure.

The initiatives you have suggested would help the cause, but it's essential to also look at the costs at the top level.

I invite thoughts from other members too.

Regards,
Kumar

I agree with Mr. Kumar as I also feel that if one air travel is avoided, one office boy can be paid for a month. Similarly, regular maintenance of machineries will reduce the cost of replacement of parts.

Cost-cutting can be done by several methods. As I am in a broking house, here are some suggestions:

1. Use one monitor only by RMs, like 1 PC for 4 people to update the portfolio.
2. Switch off the system when not in use.
3. Divide the zone and assign one person for each zone to save on conveyance costs.
4. Keep the branches on chat to reduce STD call expenses.
5. Use both sides of paper to reduce stationary costs.

Regards,
Suruchi

Hi Dev,

What Mr. Vinod Bidwaik said is absolutely right. Just the above things won't solve your problem. Try to convey the signboards for a few days and later on, just put in an extra 1/2 hour or 1 hour of work every day. This way, you can implement all the above suggestions and increase production.

If not, consider reducing outsourced jobs and distributing the same tasks among 2 to 3 associates. This approach can also help in cost reduction.

I hope this advice helps you.

Regards,
D. Bhanu Prakash

Dear Mr. Mahendrabhani,

The major cost reduction in an organization comes "when things are done right the first time, every time." The consequences of not doing so cost an organization dearly. This is the "Cost Of Poor Quality (COPQ)." Please see the attachment.

Besides the areas covered in this thread, you must seriously consider reducing COPQ. I have introduced this system in a few organizations, and their savings are considerable.

Hi Deepa N T Ramarao,

I have one more suggestion. Employees should be charged for water, electricity, cabins/cubicles, and office furniture as service charges, which would be 10% of their salary. For any additional use beyond normal working hours, they should incur an inefficiency surcharge of 5% for overtime worked without receiving any overtime pay or compensatory time off in lieu of overtime.

How's that... rocking baby...

Tamaro Nano Bhai,
Bad looser.

There are some options. India has been known throughout the world for outsourcing. So why not try outsourcing? This requires cutting your workforce in non-core areas.

These are tough decisions to be made in tough times. This also opens up opportunities. You can outsource areas that you have capacity in to other companies that have cut staff. Xerox, IBM, and Coca-Cola have outsourced some of their internal departments, such as HR.

Consult 1