Cost Management Introduction
Cost Management is an integrated program of sustainable cost reduction and continuous cost control. It is a corporate culture and an essential part of every business. Any business that has costs (who doesn’t?) should have and will benefit from a Cost Management Program. It is a necessary part of what is needed to grow a business and thus, survive.
I focus on working with small and medium sized businesses. Cost Management Programs are great for all sized organizations because they don’t have to be big to be successful. They are also a good way to start organizational improvement.
Cost Management Programs, if designed and implemented correctly, are:
· Easy to install
· Easy to maintain
· Self adapting
· Sustaining and not subject to going out of date
A good program must be aligned with company quality, service, and growth goals and should be evaluated for any possible risks. In fact, most programs will improve quality and service and savings generated by a well thought out program will be available for growth. And, they are self funded, no matter the situation. Savings generated, quickly exceed the costs of the program development and will start producing savings even before fully implemented.
Why can’t you do it yourself? Most informal programs do generate savings, but tend to miss many opportunities and are rarely sustained. Systems and policies that are easy to use and create meaningful information and results are available without reinventing the wheel. Most times outside implementation help can build company morale rather than having employees feel like ownership is just trying something new that might make their jobs tougher.
Answer these questions:
· Do you have significant competition?
· Are you facing downward price pressure?
· Are operating or production costs increasing?
· Are you satisfied with your profits?
I think I know the answers, if you are like most business owners/managers. And if I am right, you should have a Cost Management Program that will help change those answers.