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A Manager's Guide to Creative Cost Cutting : 101 Ways to Build the Bottom Line - David W. Young

A Manager's Guide to Creative Cost Cutting

101 Ways to Build the Bottom Line

Paperback Published: 21st November 2002
ISBN: 9780071396974
Number Of Pages: 292

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Cisco has done it. Motorola has done it. And now Hewlett-Packard is doing it. Company layoffs are growing as the economy weakens and companies are looking for ways to reduce costs and expand profits. Efforts to improve a company's bottom line can take one of two forms: increasing revenues or decreasing expenses. Increasing revenues is risky. Managers must make assumptions about a host of matters including purchasing patterns, competitors' moves, price resistance, product obsolescence, and manufacturing capabilities. Decreasing expenses, by contrast, is a sure thing. Once an employee is gone, so is his or her salary. This explains why almost all cost cutting efforts we read about involve employee layoffs. But cost cutting can be much more creative than that. A Manager's Guide to Creative Cost Cutting shows managers and business leaders that there are numerous ways to reduce costs without reducing staff. A Manager's Guide to Creative Cost Cutting presents the strategies and creative solutions for cutting both short-term and long-term costs to produce both immediate and continuous results. A practical, hands-on reference, this book shows business leaders and managers how to leverage all resources within their organization to improve profits, reduce costs, and create a better place to work. Filled with engaging examples and efficient techniques to reduce expenses and, thus, expand profits, A Manager's Guide to Creative Cost Cutting; - Presents creative solutions to cutting costs such as eliminating redundant activities - Highlights real-world cases, from Intel's unpaid leave to Goodyear's debt negotiation - Shows how to uncover hidden costs - Identifies the 21 cost-reduction prohibitors Each cost-cutting method covers a two-page spread, for quick and easy reading. The book is organized into two major divisions, and each division has several parts. Each part contains a variety of two-page cost-cutting methods. There is also a closing section on what not to cut. In this day of company layoffs and a weakening economy, managers and business leaders have the seemingly impossible objective of improving the bottom line and reducing costs - without killing morale. A Manager's Guide to Creative Cost Cutting makes this goal possible with the strategies and tools managers need to set the plans in motion.

Acknowledgmentsp. xi
The Basicsp. 1
Pink Slips and Red Queensp. 2
Link Layoffs to Strategic Changesp. 4
Link Layoffs to Activitiesp. 5
Make Layoffs as Painless as Possiblep. 6
Restructure Jobs during Downturnsp. 8
Manage Layoffs Creativelyp. 8
Offer Voluntary Time Off without Payp. 9
Create a Paid-Time-Off Bankp. 9
Offer Key Employees a Partially Paid Sabbaticalp. 9
Take Summers Offp. 10
Shorten the Workweekp. 10
Change Your Hours of Servicep. 11
Reduce Senior Management's Compensationp. 12
Trade Salaries for Stock Options and Bonusesp. 13
Trade Salaries for Commissionsp. 13
Reduce Salariesp. 15
Reduce Salary Increasesp. 15
Make Strategic Cuts (and Increases) in Salariesp. 16
Make Strategic Cuts (and Increases) in Personnelp. 16
Grow Personnel More Slowly Than Revenuep. 17
Align Skills (and Hence Salaries) with Tasksp. 17
Distinguish between Labor Wage and Labor Costp. 18
Shorten Testing Timep. 18
Shift from Full-Time to Part-Time Laborp. 19
Rent Employeesp. 19
Cross-Trainp. 20
Initiate Employee Wellness Programsp. 20
Don't Hire Smokersp. 21
Manage Your Email Timep. 22
Speed Up Your Connectivityp. 22
Follow the 10 Commandments of Emailp. 23
Cutting Costs without Cutting Headsp. 26
Reduce Your Bad Debtsp. 27
Make 'Em Payp. 28
Give Your Customers Incentives to Save You Moneyp. 29
Reduce Shrinkagep. 29
Work with Your Customers on Delivery Modalitiesp. 30
Find Out What Your Customers Really Needp. 31
Consider Your Featuresp. 31
Improve Qualityp. 33
Reduce Errorsp. 34
Get Some Sleepp. 34
Think Smallp. 36
Sharep. 36
Plan Aheadp. 37
Change Your Inputsp. 37
Reduce Wastep. 38
Fill Up the Trucksp. 39
Cap Some Fringe Benefitsp. 39
Look for Substitute Materialsp. 40
Mail Smartp. 40
Go Postalp. 41
Turn Down the Thermostat!p. 41
Share Fringe-Benefit Costs with Employeesp. 42
Collaborate with Your Suppliersp. 42
Consolidate Suppliers to Obtain Lower Pricesp. 43
Lean on Your Suppliers for Lower Pricesp. 43
Target Certain Suppliers for Big Cutsp. 44
Push Thinking Down into the Organizationp. 45
Find the Slackp. 45
Purchase on the Basis of Value Rather Than Costp. 46
Off with Its (Over) Head!p. 49
Reclassify Some Overhead Costs as Direct Costsp. 50
Reconfigure Travelp. 51
Negotiate Better Hotel Ratesp. 51
Reduce Travelp. 52
Retreat from the Retreatp. 52
Prune the Perksp. 53
Assess Administrative Activitiesp. 53
Reduce the Reportsp. 54
Bust the Bureaucracyp. 54
Cut Recruiting Costsp. 55
Go Paperlessp. 55
Go Nomadp. 56
Go Cash and Carryp. 57
Consolidate Shipmentsp. 57
Incur Overhead Strategicallyp. 57
Use Competitive Intelligencep. 58
Think about the Little Stuffp. 58
Manage Your Training Costsp. 59
Manage Your Growthp. 60
Reduce Moving Costsp. 60
Eliminate Requisitions and Purchase Orders for Small Itemsp. 61
Cut the Frivolityp. 61
Fixed Assets Are Not Small Gelded Donkeysp. 64
Relate Capital Budgeting to Strategyp. 65
Carefully Assess Investments in Strategic Alliancesp. 66
Site Your Facilities Strategicallyp. 67
Make Sure Your Analysts Ask the Tough Questionsp. 67
Be Sure There's Causalityp. 68
Check the Datap. 68
Look for the Hidden Causalityp. 69
Look for a Double Whammyp. 70
Look for Investments with Legsp. 71
Include Opportunity Costs in Net-Present-Value Computationsp. 72
Keep the End Goal in Mindp. 72
Consider Alternatives with Higher Payoffsp. 73
Don't Buy More Power and Features Than You Needp. 74
Relate Capital Debudgeting to Strategyp. 74
Close a Divisionp. 75
Close a Plantp. 75
Delay the Opening of a Plantp. 76
Make Your Plant More Flexiblep. 76
Move Your Companyp. 77
Move Your Officep. 78
Keep Your Old Equipmentp. 78
Get Rid of Your Old Equipmentp. 79
Beyond the Basicsp. 81
Show Me the Moneyp. 82
Reduce Your Inventory Holding Timep. 82
Shorten Your Accounts Receivable Collection Periodp. 84
Lengthen Your Accounts Payable Periodp. 85
Speed Up Your Operating Cyclep. 86
Manage Your Financing Cyclep. 88
Don't Take On Too Much Debt in the First Placep. 90
Restructure Your Debtp. 93
Trade Debt for Equityp. 93
Reduce Debt by Selling Off Some Assetsp. 94
Reduce Dividendsp. 94
Lease Instead of Buyp. 95
Manage Your Growthp. 96
No Time for Ludditesp. 101
Use Technology to Increase Productivityp. 102
Shift to Online Billing and Paymentp. 103
Use Technology to Assist Customers with Their Purchasesp. 104
Use Technology to Shorten Your Supply Chainp. 104
Use Technology to Engage in Mass Customizationp. 105
Use Technology to Study Complex Relationshipsp. 107
Use Technology to Form an e-Market-placep. 108
Use Technology to Improve Logisticsp. 108
Use Technology to Improve Forecastingp. 109
Use Technology to Limit Product Liabilityp. 110
Use Technology to Shorten Design Cyclesp. 110
Take Advantage of Technology to Lower Raw Material Costsp. 111
Use Technology to Help Consolidate Operationsp. 112
Use Technology to Manage Your Vendorsp. 112
Use Technology to Segregate Your Customersp. 113
Use Technology to Manage Your Customersp. 115
Use Technology to Better Inform Pricing Decisionsp. 116
In the Long Run ...p. 119
Distinguish between Initiatives and Tacticsp. 120
Use Work-Out Sessionsp. 121
Keep Customers Happyp. 121
Segment Your Market Creativelyp. 122
Refocus Your Product Linep. 122
Redesign Your Production Processp. 123
Use Activity-Based Costing to Understand How Costs Changep. 124
Use ABC to Staff According to Needp. 125
Use Activity-Based Costing to Eliminate Unproductive and/or Redundant Activitiesp. 125
Use Target Costingp. 126
Use Breakeven Time Measurementp. 126
Engage in a Systematic Review to Find Redundancy and Wastep. 127
Reengineer and Benchmarkp. 127
Use Operational Auditingp. 128
Institute Six Sigmap. 129
Use Surrogates to Monitor Cost Behaviorp. 130
Focus on the Cost Driversp. 131
Align Activities with Goalsp. 132
Ignore Sunk Costsp. 132
Outsource a Manufacturing Activityp. 133
Outsource Sales Returnsp. 133
Help Your Subcontractors Do Their Job Betterp. 134
Keep Subcontractors in Linep. 135
Consider Both Volume and Unit Costs in the Outsourcing Decisionp. 135
Building Systems and Networks for Cost Controlp. 137
Beyond Bean Countingp. 139
Make Sure That Fairness Is Present Whenever Possible in the Design of Responsibility Centersp. 144
Instead of Allocating Actual Overhead to Responsibility Centers, Assign an Agreed-Upon Amount Each Monthp. 144
Make Sure That Goal Congruence Is Present Whenever Possiblep. 145
When Feasible, Set Up Profit Centersp. 147
When Feasible, Set Transfer Prices at Market Ratesp. 148
Consider the Use of a Matrix Structurep. 151
Consider Using ETOBp. 152
Develop and Measure a Variety of Leading Nonfinancial Indicators of Performancep. 161
Make Sure You Can Revise Your Management Control System Quickly in Response to Changing Managerial Needsp. 162
Strategic Positioning Is Not an 'R'-Rated Moviep. 165
Focus Your Strategy in an Area Where You Can Have a Cost Advantagep. 166
If a Business Can't Make a Reasonable Profit, Sell It or Close It without Emotionp. 178
Institute Reality Checksp. 179
Hire a SWAT Teamp. 180
Reward Behavior That Is in Line with Corporate Strategyp. 180
Develop Ways for Business Units to Learn from One Anotherp. 181
Transfer Knowledge Whenever and Wherever Possiblep. 185
Use Training and Other Educational Activities for All Employeesp. 186
Hire and Promote Only the Best, but Be Sure They All Embody the Company's Culturep. 187
Be Sure That Training Includes an Emphasis on the Company's Culturep. 188
When Necessary, Use Severance to Maintain the Culturep. 189
Reinforce the Culture with Internal Communicationp. 190
Create as Many Opportunities for Conflict as You Can Manage Successfullyp. 197
Link Rewards to Organizational Strategyp. 200
Link Rewards to Cultural Valuesp. 201
Link Rewards to Nonfinancial as Well as Financial Performancep. 202
A Primer on Capital Investment Analysisp. 203
A Primer on Cost Behaviorp. 218
Notesp. 249
Bibliographyp. 266
Indexp. 269
Table of Contents provided by Syndetics. All Rights Reserved.

ISBN: 9780071396974
ISBN-10: 0071396977
Audience: Professional
Format: Paperback
Language: English
Number Of Pages: 292
Published: 21st November 2002
Publisher: McGraw-Hill Education - Europe
Country of Publication: US
Dimensions (cm): 21.6 x 14.0  x 1.6
Weight (kg): 0.37