Hot questions in this board:
Hot questions in other boards:
What does an organisation aim to achieve when embarking on cost saving projects ?
What does an organisation aim to achieve when embarking on cost saving projects ? and how can this be achieved without compormising quality or saftey? and how can cost saving culture be entrenched into tthe organisational work culture.
I've been in many organizations & situations where Sr. Management interpreted this differently.
The worst imposed unreasonable restrictions on employee decision making, tightened financial controls on things like expense accounts, or cut headcount & programs that improved employee morale, all in the name of cost savings. see https://en.wikipedia.org/wiki/Albert_J._Dunlap
The best looked at the long term and used programs like 6 Sigma to focus attention on sustainable cost savings projects and encouraged the best ideas to float to the top regardless of the source of that idea. Lower levels in the hierarchy get recognition and technical support to fully explore rough concepts and implement them.
Luis has and excellent definition of cost saving's positive objectives. Improving employee and overall productivity, reducing raw materials used and improving yield are the usual methods to get there. Having competent process experts to explore the best ideas and determine the potential ROI is what some organizations lack in today's environment.
Evans, a cost savings project aims to reduce all activities, materials and personel that does not, directly or inderectly, add value to the final client. Quality and safety are usually major added value to the final client and reduce its levels only reduce the value that is sold in the end.
Change in culture demands a change in the people's behaviour what demands a proper communication to trigger and sustain these changes. In order to do this task, I recommed you to whatch Simon Sinek TEDx video "How great leaders inspire action" and read his book "Start with Why".
Cost savings projects should be included in a product life cycle plan using tools such as but not limited to lean 6 Sigma or Toyota Production System. Being part of the total plan allows the cost savings culture to develop organically within the organization and not like a forced last minute reactive response.
Unfortunately, what sometimes happens is that cost saving measures are used as a band aid when the original optimistic business case isn't happening as planned.