Cost-Saving Ideas Needed for Steel Manufacturing: How Can We Cut Costs in Accounting?

Hi Friends,

I am working in a steel manufacturing company as an Accounts Executive in Kolkata. During this global crisis, my boss has asked me to provide suggestions for cost-saving planning in my field. Please help me by providing some suggestions.

Thanks with best regards,
Koushik Paul

Dear Kaushik,

Simple Quick solution: Being an accounts executive, you must have the list of cost drivers (refer to your P&L statement). Drill them down, identify what can be improved (under the organization's control), prioritize, and start working on them.

Long-term solution: Cost reduction can be achieved through many ways. The best method is through waste elimination. The best approach for waste elimination (eliminating Non-Value-Adding activities) is adopting LEAN Manufacturing principles. This is the secret behind companies like Toyota. It is difficult to explain how lean works through this mail, but I am assuring you, the moment you start looking at wastes (from a lean angle), you will straight away exceed all the cost reduction targets of your company.

LEAN can be applied to both Manufacturing and Non-Manufacturing areas. Many Banks and IT companies have adopted it and are seeing significant benefits.

So, why don't you give it a try?

I am happy to help with more information on both lean and cost reductions if required.

Regards,
Ramesh
tqbs@rediffmail.com

Hi, dear. Not your company, but presently, many companies are trying to reduce their costs. I am trying to help you regarding cost-saving. Maybe some tips are not applicable, but your feedback is important. Firstly, commitment is crucial. You and all your employees must be committed to saving costs. Then costs will automatically reduce. Please follow these tips if required:

1. When you go for lunch, switch off lights and fans.
2. Also, shut down the computers.
3. If necessary, use the A/C.
4. Minimize the use of four-wheelers.
5. Use one-sided paper for rough work.
6. If you take a trial print, use one-sided pages.
7. When you send documents from one department to another within the factory, use used envelopes.
8. Based on the inflation rate, decide the DA.
9. If you have tea or coffee three or four times a day, reduce it to once.
10. Avoid unnecessary internet surfing.
11. Reduce your phone usage.
12. When arranging any meeting, it's better to use the company's conference hall instead of a hotel or cafeteria.
13. Avoid unnecessary photocopying.
14. Minimize food wastage.
15. When going on visits, try to stay in less costly hotels.

Please follow the above steps. If anyone has other points, please share them.

BR/Sudhir :)

Sudhir, your suggestions are so good, but these are short-term remedies. Cost reduction has become a major issue for business organizations nowadays. Remember, always be proactive when making decisions regarding cost-cutting; people may take it the wrong way. A major part of costs can be controlled by managing your operational costs, such as inventory management, maintaining proper checks and balances on purchases, and reducing the wastage rate.

In the end, undoubtedly, a portion of costs can be reduced by actions like switching off lights and making proper use of stationery. However, these have very little impact on the overall cost. Therefore, always maintain good checks and balances on operational expenses as this is the main source of cost reduction.

If you have any queries, feel free to contact me.

Regards,
Shahid Munir
shahidmunirhr@gmail.com