Cost Management

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This is a PPT on Cost Management, a proper and refined version of what we call "Cost Cutting" . This presentation won us the first prize in a competition, the duration of the ppt was 2 minutes sharp.

Mayank Kaushik | Vivek Anand
Amity Business School, Noida, India

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Cost Management

  1. 1. Cost Management The Latest Business Mantra
  2. 2. <ul><li>COST - It is the value of money that has been used up to produce something, and hence is not available for use anymore. </li></ul><ul><li>COST MANAGEMENT – A process whereby companies use cost accounting to report or control the various costs of doing business. </li></ul><ul><li>It generally describes the approaches and activities of managers in short run and long run planning and control decisions that increase value for customers and lower costs of products and services for the company. </li></ul><ul><li>Includes Managing : </li></ul><ul><li>Amount and kind of material being used </li></ul><ul><li>Changes of plant processes </li></ul><ul><li>Changes in product designs </li></ul>
  3. 3. <ul><li>Cost Cutting </li></ul><ul><li>Cost cutting is a part of Cost Management, the “ Word of the Hour ” “ Cost Cutting ” is a panic knee-jerk reaction to a situation that only arose because of an abject failure of Cost Management. </li></ul><ul><li>``We will terminate contracts. By, for example, leaving or selling premises we don't need,'' says Volvo Chief Executive Frederik Arp </li></ul><ul><li>Jet Lite removed Magazines from flights to reduce fuel costs . </li></ul>
  4. 4. - NOT THE ONLY OPTION ! COST CUTTING
  5. 5. <ul><li>Strategic Cost Management </li></ul><ul><li>To Manage : Labor Costs + Conversion Costs + Operational Costs + Variable Cost </li></ul><ul><li>Outsourcing – The Biggest Cost Saving Techniques – to Low-Tax Countries </li></ul><ul><li>Automation of processes </li></ul><ul><li>Jet Airways and Kingfisher Airlines - wide-ranging working alliance </li></ul><ul><li>Wal-Mart and Bharti – Through Vertical Tie-ups </li></ul>
  6. 7. <ul><li>Are you moving in the right direction in such wrong times? </li></ul><ul><li>Not doing BLIND cost cutting </li></ul><ul><li>Spending on HR practices, like Motivation and Training </li></ul><ul><li>Added Value Creation for customers </li></ul><ul><li>Spending on Research & Development </li></ul><ul><li>Investments in Corporate Social Responsibility </li></ul><ul><li>To sustain the business properly </li></ul>
  7. 8. Cost Management – A Long Term Solution
  8. 9. Thank You ! Presented By : Mayank Kaushik | Vivek Anand MBA (M&S) Class of 2010 Amity Business School

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