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Continuous Cost Reduction for Global Competition

Posted in Lean Six Sigma

An industry companies that will succeed are the companies that can win the market competition. Competition in global markets, as now imposed on manufacturers to reduce costs that are considered the company’s financial influence. But more importantly accuracy in capturing the waste management of the company and not realized by the employee and member of the company concerned.

Costs in the industry play a very important role in terms of creating competence in inter-industry competition in the global market. Proportion of production costs in general could reach 70% to 90% of the total cost of sales as a whole, thereby reducing production costs will make the selling price set by the manufacturers become more competitive.

Costs incurred for the purchase of raw materials are relatively predictable and sinfulness determined. The costs of unexpected and seems to get attention., For example the cost of overtime pay because they do not reach certain targets, which led to a waste plant layout in the transport of goods, the cost of rework due to inaccuracy in the previous line, and much more waste-waste does not go out.

Plant efficiency is the key to reduction program carried out continuously. Today might be able to reduce 0.01% of the cost of production, but do not underestimate the slightest improvement is made. If done from time to time without stopping it is not possible reduction to 10%, 200%, 30% and so on. How much reduction can be done, do it for sustained efficiency.