To maximise profits and ensure competitive edge, it is imperative for manufacturers to cut down costs of products and make them more customer friendly. This was the key takeaway of the one-day workshop on “Cost Reduction for Enhancing Competitiveness” held by PHD Chamber of Commerce and Industry in association with Konrad-Adenauer-Foundation of Germany here on Friday.
CM Krishna, Honorary Advisor, PHD Chamber, said: “If we understand why we want cost reduction, our intensity of focus will change. Due to change in pricing strategy, it is necessary for organisations to reduce cost through better productivity, quality, efficiency and optimal use of all resources.”
Focus should be on optimising operations, better logistics management, reducing variability of product services, focusing on processes and removing waste including administrative, optimal use of inventory and capital, he added.
Dr Sunil Abrol, Director, World Academy of Productivity Sciences (WAPS), said almost every system and methodology that has been evolved by management practitioners, thinkers and researchers have been directed towards reducing costs, increasing productivity or improving quality.
Competition, local or global, demands ability to provide products and services that is acceptable qualitatively and cost wise. “Cost reduction is, therefore, inbuilt into all efforts to be competitive,” he said.
Dr Praveen Rathee, Regional Director, PHD Chamber, said the organisations hardly have any option but to look for ways of maximising profits and improving quality to become more and more competitive in the domestic and international markets. “This is possible by reducing cost of products and services and making them more customers friendly,” he said.