This document discusses cost optimization strategies for manufacturers. It recommends standardizing, simplifying, and rationalizing platforms, applications, processes, and services to reduce costs through operational excellence. Lean Six Sigma and other management tools can improve productivity and efficiency through process improvements. The document suggests that cost reduction efforts should involve small cuts across multiple departments rather than large cuts to one or two areas. A cross-functional team including senior management, consultants, and process experts should implement a tailored methodology starting with process mapping to identify and prioritize areas for improvement. The goal is to meet customer needs for price stability, quality, and product availability through reduced costs.

1. By
Sushanta Chowdhury
+919717570766
choudarys@gmail.com

2. A GREAT
MAKE
IMPACT
CONSUMERS
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ON

3. Introduction
• Cost optimization is a business-focused, continuous discipline to drive
spending and cost reduction, while maximizing business value. It
includes:
• Standardizing, simplifying and rationalizing platforms, applications,
processes and services
• To ensure sustainable profitable growth in a highly price-sensitive
market Cost reduction through operational excellence is the key
imperative.
• Upgrades can often be justified in terms of savings due to increased
productivity.
• Using tailored methodology of Lean Six Sigma & host of other
management tools we successfully improve productivity , efficiency
through process improvements.
• Obtaining the best pricing and terms for all business purchases
• Automating and digitalizing IT and business operations

4. Why the need for cost reduction measures
• As manufacturers, you’re no doubt always looking for cost
saving ideas that can help grow your bottom line so you can
grow your business.
 When your manufacturing efforts may not be generating the
profit margins you desire /expect.
 OR if all the strategies and efforts you are using – had not been
adding to actual growth in volume
 OR even if it’s growing – but do you know ,if that’s the best which
can be done in a given scenario in the country
• No matter how popular or useful your product may be, if you
can’t produce it- in an efficient cost-effective manner, your
business will most likely suffer .
• There are a few key cost-reduction ideas you should consider
such as:-
– Rather than making large cuts to one or two departments,
– this goal is often best achieved through several small cost cutting
efforts that ultimately add up to a significant amount of savings.

5. Who can implement these methods?
• The methodology ,is a “right” mix of management techniques introduced
in the system, tailored to the existing manufacturing/operational
environment , with a ‘SMART’ objective. The implementation has to be
best done by a team.
Governed by Senior management – thought leaders of the organization , authorized and
empowered -to be transparent in sharing “present stage”
• Process information's,
• Experiences ,
• Failures,
• Rejections,
• Hurdle's
• They can take necessary decision to call on for changes where required.
TEAM :-
• Senior management of the
• The external Consultant /subject matter experts
• Shop floor leaders /Process experts ,
• Quality Expert from quality department,
• People from all “operation” departments
• Key analyst & Coordinator/coordinator’s – who is aware of the process flow

6. Methodology
Every area of operation is unique & exclusive hence needs a
concentrative and exclusive methodology – to address the specific
need of the area.
It’s non-repetitive methodology
We address the Voice of Customer
• As per “Voice of the Customer( VOC )”,customer products should
have price stability , quality stability & product availability at a
competitive pricing.
• To meet customer requirement cost reduction is the key driver for profitable
growth.
• We start with segmentation of operation- in to different areas ,and phases
• As a starting point, start with area as decided by the management as Phase 1
Doing a complete process mapping – ‘as is where as basis’
• OR Present state mapping

7. Present State Mapping
1. Data Compilation.
2. Identification for improvement areas, through
analytical and brainstorming techniques.
3. A team decision , along with management
4. Phasing /prioritizing the do-able.
5. Implementation route map – with time frame
6. Stabilization of change stage, with checks and
effective monitoring system.
7. Assessing the improved stage ,OR New Improved
State for operational efficiencies' achieved
8. Formalizing the change as - new standard operating
process .