2. The cost is the last goal of the LED light to discuss in our articles,
but it is not the least important. In the LED tube industry, the
companies compete directly on price, so the cost is the primary
operations target. If the PAR16 LED manufacturer can cut the
cost of producing the products and services, it can cut the price
to the customers. Thus, it may increase the sales. Even if the
companies do not compete directly on price, they are still
interested in cutting their costs. If the company takes away one
dollar from the operation's cost, the company adds one dollar to
its profits potentially. This is why the organizations pay attention
to the cost goal. Therefore, the cost is a universally attractive
target for all companies, not only to the LED bulb suppliers.
3. To cut the cost, the managers should know where the cost comes
from. So the ways in which the LED light manufacturer can cut
cost will depend mainly on where the factory costs occur. In
other words, the organization mainly spends the money on the
below areas.
1. Staff costs.
2. Facilities, technology and equipment costs.
3. Material and service costs.
4. Different organizations may have different cost
structures. The cost structure is also not the
same. For example, the cost structure of the
wholesale LED track light is different from that of
the LED tube. The difference depends on how
costs categorize. However, people can
summarize some common points.
5. The costs of the LED bulb retailers are constant and generally will
not change for small changes in the number of customers in the
shop. The facilities, such as the shelves, the air-conditioning
system and the payment system are very expensive. All these
things will involve the customer service. Some of the retailer's
costs will be the payments to the outside services such as the
cleaning company and the delivery company. There are more
outsourced services. These are part of the operations costs. For
an LED light manufacturer, the payment for raw materials and
other suppliers will be greater than other costs. However, the
wholesale LED track light designing company will have fewer
costs on its suppliers. The main costs will be staff costs, the high
payments to the designers and technicians.
6. Besides the product costs, the LED tube wholesaler spends a lot of
money on the fuel, as it needs to offer frequent delivery services
to the customers. In some extreme cases, some companies'
costs are mainly on buying the supplies. For the product costs,
the PAR16 LED manufacturer can make a change, but an LED
light retailer can do little about it. The sourcing department
makes all purchasing decisions of the LED tube products, and
other departments cannot influence the purchasing costs. They
can only pay more attention to use the facilities, the building and
the staff.
7. Other operational goals also
influence the cost goal.
The earlier articles discussed the function and effects
of the quality, speed, dependability and flexibility for
the operation goal. Through the discussion, the
readers can get the value and function of each
operation goal, and know the importance to the
internal operation and external customers. All these
performance goals have the internal effects, and
they all affect the cost goal. The LED bulb
production is an example.
8. 1. The flexibility.
A flexible organization can react to the changing
circumstances quickly without disrupting the rest
of the production activities. The flexible
operations can also adapt to the changes
between different tasks quickly without
influencing the efficiency. The production line of
the wholesale LED track light is an example.
9. 2. The dependability.
The dependable operations can react to the
unpredicted changes on the internal activities. It
is reliable enough to deliver the services as
required. This will keep the operation working
efficiently. The LED light manufacturer is an
example.
10. 3. The speed.
The fast operations will cut the level of inventory
between the production activities. It can cope
with the flawed service effectively. The PAR16
LED manufacturer is an example.
4. The quality.
The quality operations can guarantee the job
efficiency. It saves the time and effort caused by
the errors in the work. The production line of the
LED bulb is an example.
