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Some costs can be reduced with little risk of an adverse impact on quality and performance.
1. Checking supplier invoices may reveal overcharging. Common examples are double billing, incorrect charges and missing discounts.
2. Eliminate unnecessary costs. Get rid of obvious overcapacity (eg unused telephone lines). Cut out blatant waste (eg heating premises at night, or with windows
open). Scrap useless processes (eg paperwork that is completed, filed and forgotten).
3. Crack down on excessive costs. Use second class postage, or email or fax, unless only first class post will
do. Find alternatives to high priced suppliers, or negotiate discounts. Avoid over-specifying (eg high-quality components for a low-quality product).
Ban wasteful luxuries (eg full-fare business class flights. Cutting back on items employees see as ‘benefits’ or ‘perks of the job’ needs careful handling.
4. Root out inefficiency. Identify manual, paper-based systems that could be replaced by
computers. Avoid frequent small orders. They waste time and may mean you lose
discounts. Consider switching to single monthly invoicing to cut processing and admin costs.
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