No matter how big the business scale is, if you want to make more profits and effectively save every penny, it is still very necessary to implement the low-cost principle. On the first day of work in 2020, the editor shares six ways for textile companies to effectively save operating costs to help textile mills make more money in the new year~
Here Advocating “effectively saving operating costs” is conducive to the formation of the company’s core competitiveness and the improvement of its value creation capabilities. In reality, many companies still have the following misunderstandings in cost management:
First, the lower the cost, the better. Enterprises cannot blindly pursue low costs at the expense of product or service quality and customer response time. This may lead to continued increases in subsequent costs, thereby losing the enterprise’s core competitiveness and value creation capabilities.
Second, cost management is not just a matter for the financial department. The concept of cost management must penetrate into all aspects of the enterprise and rise to the level of corporate culture, system, strategy, etc.
Third, cost management is not as detailed as possible. All management measures must consider the relationship between input and output, and achieve the optimal cost level under certain allocation conditions of human, financial, and material resources, and do not require step-by-step cost deductions.
Fourth, cost management not only focuses on saving, but also on prevention. In the production process, we should not waste unnecessary costs, but also prevent cost waste by improving working methods and other measures. For example, reducing waste yarn, saving energy consumption, zero inventory, operation analysis and improvement, etc. are all within the scope of cost prevention.
Where can we start to achieve effective savings in corporate operating costs?
1. Benchmarking
Internal benchmarking. Find the grassroots, teams, or individuals with the best cost management performance in the enterprise as representatives, analyze their cost management status quo, summarize their advanced experiences and practices, and promote them comprehensively in the form of “point-to-area” to drive the improvement of the company’s overall cost management performance. .
External benchmarking. Select benchmarks within the same industry and across industries outside the company. By analyzing the cost levels of domestic and international competitors in the same industry, we can summarize the advanced experience of benchmarking companies in cost management, or analyze what management measures are needed to achieve the same cost level as competitors, so as to achieve effective cost savings.
2. Refined management
Enterprises must change extensive management method, and gradually realize the move towards refined management. To involve all aspects of the enterprise, the financial department needs to cooperate with other departments to organically combine product design and marketing network with revenue and cost control to achieve full participation. Effective tracking and monitoring are carried out in every key link of the enterprise, so that wherever the enterprise’s business activities develop, the reach of cost savings will extend.
3. Value chain management
Cost savings should penetrate into enterprise value All aspects of creation go deep into the planning, design, procurement, production, sales and other links of the enterprise, and comprehensively and meticulously analyze and control the costs within and between departments.
The scope of cost savings is not limited to within the enterprise, but also transcends enterprise boundaries for cross-organizational cost management, upstream (suppliers) and downstream (customers) related to the enterprise value chain Establish strategic partnerships to reshape the company’s cost and competitive advantages.
4. Standard Management
First-class enterprises set standards and pass Improving standards can avoid cost waste and ultimately enable accurate, efficient, coordinated and continuous operation of all organizational management units.
If an enterprise lacks standard management, it may lead to unstable product or service quality, low operating efficiency, and an inflated increase in operating costs.
5. Process Management
Through process optimization and reengineering, Make the responsibilities of horizontal and vertical management of the enterprise clearer, make the key work processes of the positions clearer, clearer, simpler and more reasonable, eliminate non-value-added parts, prevent risks, improve efficiency and avoid cost waste.
For example, the reduction of corporate procurement costs can be achieved through process optimization. Introduce competition through bidding, give full play to the game mechanism between suppliers in public bidding, and scientifically and fairly select suppliers that best meet their own cost and interest needs; reduce procurement processing costs through electronic procurement; use scientific economic batching Calculate and reasonably arrange procurement frequency and batch size to reduce procurement fees and warehousing costs; and make selective purchases of services and raw materials provided by suppliers.
Using scientific process management as a platform, we will refine job responsibilities and improve internal management processes by formulating strict, meticulous, practical work specifications and supervision mechanisms to reasonably save costs.
6. Corporate Culture Management
Enterprises should create a cost-saving environment Cultural atmosphere, focusing on the subtle penetration effect of corporate culture. Cost saving should be elevated to the level of cultural construction and mechanism construction, and a strong awareness of cost saving should be established.
Save every penny and use your money wisely. This should be the basic requirement of financial management. Enterprises can only continue to improve their adaptability, plan every penny well, use every penny well, and earn every penny they can.Only an enterprise can develop healthily and stably and remain invincible in future competition.
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