The document discusses the differences between cost management and cost cutting. It presents a 4-point cost management model focusing on reducing quality costs, cycle time, and non-value adding activities and eliminating waste. The document emphasizes that organizations should practice efficient cost management, not cost cutting, as the latter can lead to quality problems. Cost management aims to improve efficiency rather than simply reduce costs.

1. FICCI CE
Cost Management model
1. Reduce 2. Reduce
quality costs cycle time
3. Eliminate
4. Eliminate
non-value adding
waste
activities
Note: See respective sections for more details

2. FICCI CE
Cost management Vs cost cutting
Most of the organizations have wrong notions about cost. They
confuse cost management with cost cutting measures.It is
extremely important to understand that cost management is
different from cost cutting.
What is required by the organizations is efficient cost
management as depicted in the above figure and not cost
cutting.
Many times organizations who have taken resort to cost cutting
have faced serious quality problems.