This document discusses cost reduction strategies and incorrect approaches to cost reduction. It begins by outlining some common but misguided cost reduction approaches that companies undertake, such as solely focusing on direct labor efficiency improvements, indirect labor reductions through automation, forced price reductions from suppliers, and outsourcing without proper evaluation.
It then contrasts these "painful" cost reduction strategies with alternative "no-painful" approaches like improving quality to reduce costs, effective asset utilization tied to sales growth, value analysis/engineering to find material savings, inventory management improvements, and shifting indirect work to direct. The document cautions that sole focuses on cost cutting can damage future earning power and capabilities if not approached thoughtfully.