There are two ways to increase a company's
profitability: increasing revenue from products/services or reducing operating
costs. Important to say that the two can be complementary!
Therefore, in this post we are going to focus on
cost reduction and the first important point is that you should not think about
reducing operational costs only when the organization gets into difficulties.
On the contrary, this control needs to be done as a means of prevention and
financial organization.
Therefore, cost reduction is directly linked to the
efficiency of the production process and should be done as long as it does not
affect the quality of the products/services and, consequently, the results.
Today we have separated 5 ways to reduce expenses without compromising the
quality of the company. Good reading!
How to
reduce operating costs in the company
1. Discover
and eliminate waste points
Map processes so that cuts are critical to business
performance. Thus, analyze from the supply chain to the delivery of products/services.
Here it is also important to think about basic practices such as energy,
telephone and water. Does your company use energy efficient light bulbs and is
there an awareness of employees regarding energy use? Are ventilation and air
conditioners turned off when there is no one else in the room? Is the use of
water made consciously? Points of waste can be found in the product production
process, in the service delivery process, or in the employees' culture with
respect to equity. Small changes in habits can generate savings for the
company!
2.
Re-evaluate supplier contracts
If the company works with exclusive suppliers, it
may be a good alternative to get in touch with others to negotiate more
attractive values and goods. Also, if you operate with several of them,
strengthen the relationship so that you can obtain more competitive prices in
exchange for exclusivity. Another tip is to add an expected service level
clause in the contract, so that there is a quality guarantee or
fine/compensation in the absence of it.
Read also: Auditors in Dubai
3. Set goals
To reduce resources it is necessary to have
effective processes, so that teams and each employee operate to achieve the
requested results. To do this, define performance indicators that present
characteristics of each function or department. Evaluate the workflow and find
ways to measure its efficiency, which could be:
·
productive x unproductive hours of teams;
·
number of calls made;
·
time spent per client and per displacement;
·
average fuel consumption expenditure x driven
kilometers.
4. Automate
and outsource processes
You can purchase an integrated management software
to control everything from cash flow, accounts payable and receivable, to
others. With this, you will be able to have a global vision of what is
happening in the company. Consequently, it will identify opportunities or fix
issues that are affecting the profit margin.
In addition, cut extremely manual processes that
can be done faster and smarter, automated or outsourced. Your company needs to
focus on the core business . Anything that is not directly linked to this can
be outsourced.
5. Engage
the team in cost reduction
An organization that invests in training its
employees is more likely to implement new technologies, obtain more engagement
and strengthen the organizational culture . After all, more prepared
professionals are motivated, avoid rework, reduce waste, as well as turnover.
Therefore, when reducing operating costs of your
business, it is essential to carry out strategic monitoring through success
indicators , in order to find out to what extent the reduction is being
beneficial. In this way, it will be able to offer more competitive prices to
consumers, more efficient production and optimized management.
Now, if you found this article interesting, how
about reading one more about what you need to know before open
a business?
