Cost Reduction: Where to Find Real Cost Reduction Opportunities

http://www.CostMatters.com Cost reduction is often regarded as a job for Finance. After all, who else has visibility to all the money? But this does not work. Leaving this important area to Finance usually results in short term and ineffective results. Instead, Finance need to work closely with operations and provide cost measurement tools that operations can understand and use. The principles and methods of Activity-Based Cost are some of the most effective tools that can be used.

Category:

Education

Tags:

• Cost Reduction
• Activity-Based Cost
• financial statements
• financial partnership
• Alan Stratton
• PPMMEE
• controller responsibilities

[PerformMgmtEdge]

@srastgar I've inflicted traditional budgets on many people. For this I apologize. Budgets are largely ineffective as you note. They are an attempt to provide financial information but largely fail to communicate the financial essentials to operations.

[srastgar]

And it never worked well. Later we decided to monitor and give feedback on Key Performance Indicators / MBO and that yielded much better results.

[srastgar]

I remember years ago we tried to control operations through budgets. And it