Reducing production costs is a vital process for any company, since the growth (often unjustified) of cost-forming costs significantly reduces the profits that the founder is counting on. Therefore, the issue of cost reduction remains relevant at all times. How to optimize costs will be discussed in our publication.

Cost types

• Effective (invested directly in the product and paid off during implementation) and inefficient (non-production types of losses - marriage, downtime, theft, etc.);
• Constants, variables (directly proportional to the level of production), mixed, containing a constant and a variable part;
• Direct (for the purchase of raw materials, payment of wages) and indirect, not directly related to the production of a certain type of product (management costs, costs of service industries).

Reserves for cost reduction are embedded in production and the ability to competently manage it. For example, measures such as the development and determination of technological cost standards at each production stage, as well as their observance and the establishment of liability in case of violation of the norms, are important. A well-conducted analysis of the effectiveness of servicing and auxiliary farms in various areas, as well as outsourcing services, gives excellent results in cost optimization.

These issues lie in the plane of accounting and are an integral part of cost control measures, but there are other levers, the use of which reduces the cost of products.

Ways to reduce production costs

Based on the analysis data, the following activities are developed:

• All costs are clearly categorized;
• Those costs that can be adjusted are determined;
• Designated costs are planned and optimized.

Costs to be optimized often include:

• Labor costs. For example, when revising the range of products, the number of personnel is often reduced;
• Costs for the purchase of raw materials and materials. You can optimize these costs by organizing a search for new suppliers, reviewing the terms of supply agreements, introducing resource-saving technologies or developing your own production of the necessary consumables;
• Production costs:
  • rent payments. You can reduce the amount of rent by buying the premises from the owner, or by subletting part of the space;
  • energy resources;
  • repair and maintenance of equipment. Part of the work can be shifted from contractors to their own repair facilities;
• Fare. If possible, limit the fleet of official cars, or, having calculated the benefits, use the services of an outsourcing company;
• Advertising spending. After analyzing the effectiveness of an advertising campaign, you can reduce the advertising budget by generating it to present the most profitable products or by entering into agreements with partners on mutually beneficial terms. For example, by offering barter deals.

Since a significant share of costs consists of production resources, special attention is paid to them. It is necessary to establish strict control over unused equipment, which can be dismantled with useful leftovers credited, and idle operating systems can be implemented. The use of advanced technologies will make it possible to introduce more economical equipment, or to further develop low-cost auxiliary production.

Debt receivables divert funds from circulation, and special attention should be paid to its optimization. This is expressed in constant work with debtors.

How else can you reduce production costs?

Each company chooses a production optimization line based on its specifics or industry specifics. General actions for all enterprises can be considered such expert recommendations to reduce production costs:

• Consider the possibility of integrating production with partners by transferring part of the technological cycle to them;
• Properly manage inventory. It is necessary to calculate the required volume of inventories, the minimum and mobilization (if provided), the volume of finished products and goods in transit, with the preparation of delivery schedules and payments for them;
• Planning of logistics processes. For example, some companies save on the storage of goods by using freight transport. Equally important is the correct choice of a transport service provider.

In addition to these methods, any company is required to plan for cost reduction, providing for financial discipline, effective accounting and periodic audits with an analysis of the losses incurred.

How to reduce company costs without laying off staff and cutting wages

In this article, you will learn about several alternative methods for reducing enterprise costs and get acquainted with examples from Western practice (see How to reduce personnel costs in foreign companies and How to stop losing money without putting much effort: advice from Russian colleagues). We bring to your attention 16 original ways to deal with unnecessary spending.

How to reduce personnel costs in foreign companies

Real estate agency Luxury Retreats practices a reshuffle. So, eight employees from the development department were trained and began to work in the sales department (in positions that bring profit to the company).

Rhino Foods, an ice cream ingredients company, sends employees to work at Autumn Harp, a color cosmetics company, when demand drops.

The leadership of the Accolo recruitment agency asked employees to take five days of unpaid leave, promising not to cut salaries.

Paint manufacturer Sherwin-Williams has introduced a variable vacation schedule for employees at its own expense - voluntary suspensions from work for six weeks.

Bob Fifer, head of the consulting firm Fifer Associates, has used these methods.

• He stopped including “mandatory” expenses in the budget - for the purchase of furniture, hiring new employees, etc. He announced that the allocation of money for these items requires his personal approval. Few applications were received, funds were not spent.
• Refused couriers. Six months later, everything was fine: they began to send something by mail, employees delivered something to contractors when it was on the road.
• Restricted the budget for the maintenance of the office. While advising a firm, he suggested, without discussion, a 40% budget cut ($3 million a year). As a result, the adjusted budget was not exceeded.

How to stop losing money without much effort: advice from Russian colleagues

Introduce e-procurement. The tender announced on the Web attracts a large number of suppliers who are ready to make concessions in order to win. If you conduct an auction with a short list of suppliers in real time, the price drops by an average of 10-15%.

Set a minimum order quantity. Due to underloading of vehicles for retail deliveries, profitability may be lower by 8-12% compared to deliveries to large customers. You can either enter a minimum order amount or charge for shipping an item with a total value less than the amount you set.

Prohibit the use of office phones for personal purposes. A printing company from Nizhny Novgorod receives a printout of calls from work phones from a mobile operator and analyzes those that cost more than several hundred rubles. The company has warned workers that spending on personal calls will be deducted from their paychecks. As a result, the monthly fee for telephone communication has decreased from 200 thousand to 40 thousand rubles.

Practice experience: Kirill Gulyaev - General Director of the First Printing Plant, Krasnogorsk (Moscow region)

Save heat, load warehouses, commercialize the canteen

Heating due to the heat generated by the equipment. This method is called heat recovery: we use the exhaust hot air to heat the production facilities. The purified air coming from the printing equipment is not emitted into the atmosphere, as is usually done, but enters a special heat exchanger. There, hot gases heat the water that goes into the heating system of the enterprise. This reduces the load on the boilers and reduces heating costs. Equipping machines with heat exchangers increased their cost by a fraction of a percent of the original price, and the use of this technology allowed us to save, according to the most conservative estimates, about 8 million rubles. in year.

Reducing logistics costs by renting warehouse space to its suppliers. We have our own warehouse complex with an area of ​​7500 sq. m. According to the production technology, we must store a two-week supply of paint in the warehouse. At the same time, most of the consumables are imported from abroad. In order to reduce shipping costs, we offered one of the major suppliers to lease our warehouse space (about 6% of the total warehouse area). The supplier agreed, and now for us the logistics are limited to the delivery of ink from our own warehouse to the print shop. Raw materials are not listed in our warehouse stocks and are supplied in exactly the required volume as needed. In addition, we received additional rental income, and our partner gained conveniently located warehouses and a loyal customer under one roof.

Services of own dining room for third-party companies. There is a canteen at our enterprise, employees can eat tasty and high-quality meals at minimal prices due to subsidies from the company. At a certain point, the cost of the canteen became burdensome for us, as food becomes more expensive, and raising the price of food is an unpopular measure. As a result, we commercialized the canteen and entered into contracts with organizations located nearby. Now we deliver lunches to neighboring offices on the machines of the plant, and some employees of these enterprises come to us themselves. Due to the fact that food purchases were increased, we were able to reduce costs. This made it possible to bring the corporate canteen to break even without increasing the load on the wallets of its own employees.

Practice experience: Sergey Shilov - Managing partner and owner of AT Consulting, Moscow

Transferred the IT department to self-sufficiency

One way to reduce costs is to make those departments that do not normally generate direct profits self-sufficient. For example, during the economic crisis, our IT department began to serve some of our customers (in particular, those who use the same mail system as we do). Employees began to support this system for a separate remuneration, partially compensating for their content. As a result, the company's expenses for this department were reduced by 40% in four months.

Practice experience: Evgeny Firsov - Deputy General Director for Operations, APK Stoilenskaya Niva, Stary Oskol (Belgorod Region)

Purchasing raw materials at minimum market prices

A dozen and a half bakery enterprises of the group purchase raw materials for 190–200 million rubles a month, their total share in the cost of production is about 40%. The range of price fluctuations in different groups of raw materials is from 3 to 30%. It turns out that a change in the price of some of its types by only 1 ruble can cost us 5 million rubles. per month across the entire holding.

Procurement is carried out directly at the enterprises of the holding, which creates

fertile ground for corruption. In order not to tempt employees, we have introduced a special information system called Stoilenskaya Niva - Raw Materials (informally, we call it Izyum). Now our 14 purchasing centers operate in conditions of internal competition and absolute transparency, when everyone sees everyone.

The principle of operation of the system is as follows: an employee of the supply department, who is going to purchase raw materials, is obliged to print a special sheet, which is automatically generated by the Izyum system. It describes in detail when this raw material was purchased both by the enterprise itself and by other companies that are part of the group. The document shows the best prices at which raw materials were purchased over the past 10, 30, 60 and 90 days. As a result, the supply department employees receive the necessary information, and the financial director, who does not even understand the nuances of the sugar market, will not miss a specific deal, because he will see: for example, sugar was bought cheaper at a neighboring enterprise three days ago. If the proposed transaction is made, it immediately enters the centralized information system, where a database is formed containing information about all transactions.

For example, a large enterprise that purchases fairly large volumes of raw materials turned out to be in the middle in terms of prices, while a small enterprise, where prices seem to be higher due to small volumes, achieved the lowest prices for raw materials among all enterprises of the group. Naturally, we parted ways with buyers at a large enterprise and transferred specialists from a small one there. The situation changed instantly, and today it is our leader in procurement efficiency. There were cases when line managers of supply departments at enterprises tried to test the system. Some of them declared as an ultimatum: “There are no such prices for cottage cheese, if you don’t believe it, come and try to buy it yourself.” But the system dryly stated the opposite, and for some reason everything worked out right away for the specialist who was taken in the place of the dismissed one.

System administrators - two people in the company's central office: the head of the price analysis service and his assistant. The tasks of this group are technical administration, transferring information about the best prices to managers of all enterprises, and proposals to managers to terminate labor relations with unscrupulous buyers. Also, these specialists control simultaneous purchases for several factories at once, so that, by interacting, we can get additional discounts.

Everything you need to work should be at hand - this will increase productivity

We have been implementing process management technology at our enterprise for the third year already. To begin with, we measured and analyzed the consumption of working time for each production operation (for example, preparing raw materials, preparing a dish). In particular, it turned out that quite a lot of time is spent looking for the right ingredient or tool. By optimizing the workspace, we were able to reduce waste and increase productivity by 16%. This was achieved thanks to the “bent arm” rule. The essence of this rule is that you can reach everything you need for work without fully extending your arms. For example, the chef's workplace is now organized in such a way that he does not have to run for inventory from one end of the workshop to the other (moreover, we have fixed in the company's standards what should be located next to the chef's left hand, and what should be next to the right, on how far away should inventory and equipment be placed). As a result of the measures taken, we were able to reduce the number of personnel at each facility by transferring people to new production facilities.

Stanislav Tulchinsky

General Director and Partner of b2b.Technologies of Development LLC

The topic of the struggle to improve operational efficiency in companies is very often discussed, especially in recent times. The reason for this is called a lot of reasons, both objective (the financial crisis, the rise in the cost of borrowed money, increasing the level of competition, inflated demand from buyers, etc.) and subjective (special attention on the part of the government and international rating organizations to productivity issues). This article is intended, first of all, for those company executives who are thinking about how competitive their business is in terms of its internal structure. We tried to give practical examples of quantifying the sources of losses and their elimination in the organization, as well as to demonstrate the most convincing example of the effectiveness of using the method of finding and eliminating losses, in contrast to the traditional "cutting" costs. The obvious advantages of this approach are that, as a result of finding and eliminating sources of losses, the organization receives not only cost reduction, but also a reduction in the time spent on providing services with an increase in their quality. At the same time, the cost reduction itself is much more effective than the traditional “cutting” of budget items by a certain percentage. The disadvantage of this method is that it requires significant intellectual effort on the part of those who struggle with costs. In return, it allows not only to manage the cost budget during the crisis, but also to seriously revise the downward cost structure and the company's management system, reorienting it towards obtaining a long-term cost advantage. Additional advantages are also that the use of the proposed method never leads to such consequences that take place in the traditional approach to cost reduction, namely:

• To the tension in the team due to excessive workloads on staff - on the contrary, workloads can be reduced!
• To the reduction of people involved in important and necessary work for the organization - it becomes clear who is doing what!
• To an increase in the number of errors and problems due to excessive workload of personnel - the sources of errors themselves are eliminated!
• To Increased Customer Satisfaction - Reduced maintenance time, cost and errors leads to increased customer satisfaction!

As an illustration, we propose to consider only one source of possible costs - the inefficiency of the processes of an operating-level company (for more details on other sources of costs, see, for example), but our approach is applicable in many other cases. We specifically focused on this example to show that a company's significant daily losses can be where no one expects to find them. Despite the fact that the example contains the specifics of credit institutions and processes specific to this area, the essence remains universal, because the true reason for the described inefficiency lies not so much in the details of a particular company, but in the organization of the business itself, and this problem is typical for very many companies !

And yet how much?

Such a statement of the question causes many leaders, at best, bewilderment. What can you save on penny work? Why bother with this issue? The company signs several hundreds (thousands) of contracts a year, this process is streamlined and costs almost nothing. This point of view is present in most leaders of organizations. If, however, you show great perseverance in this matter, then, after thinking for a while, you can get the assumption that nevertheless such work takes 40 minutes, well, an hour maximum, and will cost about 200 rubles (the cost of an hour of work for an employee with a salary of 30 thousand rubles per hour). month plus paper cost). Try to test yourself. How much do you think your company will achieve? For this example, it was estimated, using the tools of functional cost analysis (FCA), how much time and money a credit institution spends on processing one credit file, starting from the moment the decision on lending is made and until the moment the money is transferred. The results of the analysis were: the average time of execution of one contract is more than 10 working days, and the cost, on average, amounted to 11,000 rubles. Moreover, the spread of variations in terms and costs turned out to be quite large: approximately 15% of contracts were executed for more than 20 days (the maximum period is almost 71 days) and the cost of processing was more than 18 thousand rubles (maximum 71 thousand rubles). All this cannot but worsen the quality of an already not very client-oriented process for the client. The first reaction of any leader is: “This can’t be, nonsense? fiction! Where did you get this from? The following are explanations and calculations that show that these figures are quite real.

Black magic and its exposure

Let's try to figure out how these numbers add up using the Business Studio business modeling system. The figure (Fig. 1) shows a map of the described process:

Analyzing its features, it is worth noting, first of all, that bank employees use several information applications to draw up a credit file:

• The main software (software), the so-called "operday", which maintains the balance sheet, accounting accounts of customers and the bank and all the postings of the company, is supplied by one of the leading Russian developers of banking applications. The software comes in an advanced package with a set of features, most of which are not configured and not used. The software is used only to account for settlement and cash services (RKO), the formation of basic reporting for the Central Bank of the Russian Federation;
• An application for accounting for credit transactions, which records all documents for the issuance and servicing of customer loans. Software of own development based on MS Access and Excel;
• Application for accounting for collateral and customer collateral under loan agreements. Software of own development based on MS Access and Excel;
• Application for accounting for transactions falling under the federal law 113-FZ. Software of own development based on MS Excel.

In the process of processing credit files in the bank, employees of various departments are involved, the approximate cost of which is given in the table. The amounts are indicated taking into account the UST and personal income tax, in other words, the cost of the work of employees is slightly lower than the average market.

The following resources are also involved in the process at an average cost:

The cost of internal services above is calculated without using bank data, based on average market prices and taking into account the average IT architecture adopted in most small banks. Each organization has its own figures for these items of expenditure. True, very few companies calculate them and, moreover, try to manage them.

Let's comment on how some of the above figures came about:

• Services for the use of the main banking software consist of the cost of the software itself, its configuration and implementation, support services for the developer company, jobs, maintenance personnel (business analyst and database administrator), as well as maintenance of the database management system (DBMS);
• Services for the use of LAN and communication facilities consist of the cost of network and telecommunications software, network and telecommunications equipment (automatic telephone exchanges, telephones, handsets, etc.), monthly service fees (telephone, Internet), as well as the cost of the work of a network administrator and a specialist in telecommunications;
• Services for the use of domain system servers consist of the cost of primary and secondary servers and racks, server software, disk arrays, regular maintenance fees and a monthly fee for the services of a systems engineer.

The data used for calculations are shown in the table:

In the above calculations, timekeeping data and expert opinions of employees were used to determine the following indicators: the time it took to complete each operation, the frequency of errors, the number of forced checks to identify and eliminate them, correcting customer details, and agreeing on the changes made.

It is worth noting that the complexity of the process depicted on the map is clearly betrayed by the work associated with checking and making corrections. This is a consequence of the fact that the bank uses several informational applications to carry out this simple operation. The data is entered manually, so errors occur regularly, in about 10% of the dossier. First of all, these are inaccuracies associated with entering the same data (client's full name, legal address, passport and registration data, etc.) into different programs with deviations from the original. Errors of this kind (for example, in the client's passport data) that fall into the signed loan or pledge agreement can cause serious financial and reputational losses for the bank, for example, the client may refuse to fulfill his obligations to the bank. Correction of such inaccuracies at various stages of filing a dossier requires the involvement of both employees of related departments in order to clarify that this is really a mistake, and not another client with similar data, and managers of various levels in order to coordinate the changes that have occurred within the bank.

The average total costs for issuing one credit file, taking into account the work described above, calculated using the FSA method, are shown in the table:

Analyzing the results, it can be seen that due to the rather large amount of work on the coordination of changes, a lot of working time of the management staff (heads of departments and the vice president in charge of the direction) is spent. If a bank concludes an average of 260 agreements per year, then approximately 67% of the vice president's and 81% of the head of the loan department's time (out of an 8-hour working day) are spent on clarifying, agreeing and resolving deviations in loan agreements. They will clearly need to find additional time to carry out their other duties. The total cost (only!) of processing 260 credit files per year will be approximately 2.86 million rubles and 5.6 thousand man-hours (or 3 man-years) for the bank.

Perhaps someone will not agree with the above prices or want to slightly change the execution time of each of the elementary operations, but this is unlikely to change the total amounts “by several times”.

What to do?

If you analyze the process map, you will notice that most of the operations performed do not bring any additional benefit to the end client (borrower), for which he would be willing to pay extra. Most of the operations are not even focused on the requirements of the internal consumer in the face of the company's management or the external consumer in the face of regulatory bodies. In other words, these are pure losses that do not create any added value associated with the peculiarities of building an information system.

Is it possible to correct the situation, or, despite the impressive numbers, is it an objective reality that cannot be avoided? Let's take the trouble to model some improvements and see what changes if the existing process map is corrected. At the first stage, we will not waste our efforts on finding ways to increase the productivity of employees, making changes to the lending process, document flow, and business model. Let's try to see what happens if we make changes only to the software. Do not introduce new software, do not add new functionality, but simply assume that in existing software someone has adjusted the capabilities already available in it, and now all data can be entered only once and only in one software. The modified process map is shown in the figure (see Fig. 2):

The cost of resources and the time required to implement the process will remain the same. As a result of the calculations, we get the average time for processing one contract, which will be about 3.5 business days, and the average cost is 2,500 rubles. Moreover, all contracts were executed in 5 or less days, and the cost of execution was less than 6.3 thousand rubles (only 7% is more expensive than 3,000 rubles). In other words, it was possible to significantly reduce not only the time and cost of drawing up one contract, but also significantly reduce the spread of variations. The total average costs for processing one credit dossier are shown in the table:

Analyzing the results, it can be seen that the time spent by bank managers has significantly decreased. Using the same example as in the first case, we get that only about 7% of the working time of the vice president and 15% of the head of the loan department (out of an 8-hour working day) will be occupied with clarifying, agreeing and resolving deviations in the execution of loan agreements . The total cost of processing 260 credit files per year for the bank will be approximately 0.6 million rubles and 1.3 thousand man-hours (or 0.7 man-years).

Who is guilty?

In other words, savings in money alone can amount to more than 2.2 million rubles a year. Was it possible for this money, having 2.3 man-years of released human resources, to fine-tune the software? The question is rhetorical.

Probably, the bank has departments that evaluate the economic efficiency of operations, and are also responsible for the implementation of the IT strategy. In this case, it is worth considering that the above costs are just the tip of the iceberg. For example, if the load on the network, the domain system, and the need for personal computers are reduced by 20-30%, and the need to maintain specialized (read, homebrew) software disappears altogether, then other freed up resources will appear.

It is important that the resources freed up as a result of optimization are not idle, but loaded with some other payload, for example, transferring the released employees to another job instead of hiring additional staff for these purposes. In this case, the results of savings may not be virtual, but material.

Brief summary

After reading this article, you may have doubts: is this not a special case, because in your company this process is most likely implemented differently? Well, or maybe it will be enough to deal with an inefficient IT service with a couple of questions, and everything will work out? I am sure that the problem of the company in the above example is not so much in the IT service, but in the organization of the business itself, and it is typical for so many companies!

The above process map is far from optimal, it contains even larger amounts of losses. Moreover, if we transfer this map to the entire sales process and try to optimize it, then the “reserves” found there may surprise no less, and, I am sure, much more than those described in this article. Modeling of processes, analysis and search for costs should be carried out not “manually”, but using specialized software. In this work, to demonstrate an example of a functional cost analysis, we used the most accessible and widespread Business Studio system.

Vladislav Gagarsky Head of Management Systems Optimization at Nevskaya Consulting Company
Production Management Magazine, No. 1, 2009

During the current financial crisis, when business activity is falling and production volumes are decreasing accordingly, for most enterprises, cost reduction becomes a matter of survival. But this process must be approached very deliberately so that vital aspects of the company's operations are not affected as a result.

Cost Sharing Approach

All costs can be fundamentally divided into two types: productive and unproductive. Productive costs are those that add value to the end product in the eyes of the consumer, while unproductive costs are those that do not add such value to the product. The line between the first and second is very thin. For example, what type of cost should include the salary of the main production workers? At first glance - to the productive, because the workers are paid for the output. But in the case when the payment was made for downtime due to the fault of the employer, the corresponding costs cannot be recognized as productive. Moreover, in a situation where workers work tirelessly, but due to the saturation of the market, no one buys products, the costs will also be unproductive.

The type of costs determines the overall strategy for reducing costs during a crisis. So, production costs should be reduced in proportion to the projected decline in product sales. For example, if a decrease in production by 30% is expected, then the volume of purchases of raw materials and components must be reduced by about the same amount (taking into account current stocks in the warehouse).

And here unproductive costs should be eliminated completely. Moreover, it makes sense to do this regardless of the onset of the crisis and the degree of its impact on the situation in business, since losing money is always unpleasant.

Within the framework of unproductive costs, in turn, several groups can be distinguished. Let's name and briefly describe each of them:

Costs caused by overproduction of products. The essence of the problem reveals one phrase: "We produce more than we can sell." Shortcomings in product planning, inadequate understanding of customer needs, and large production reserves lead to overproduction. As a result, a lot of resources, time, etc. are spent. (which ultimately leads to monetary costs), but there is no return (revenue).

Costs due to defects and rework. Defects and rework, that is, irreparable and reparable defects, are harmful from the point of view of generating unproductive costs for the same reason - resources are spent on them, and there is no return (or it is relatively small in the case of a correctable defect).

Costs associated with excessive movement and movement of materials, parts, tools, due to their irrational location. Simple examples: a worker is forced to go to the utility room to get the right tool, instead of reaching out and taking it from a nearby rack; workpieces are constantly shifted from one end of the workshop to the other, and do not move them sequentially to the minimum distance between sections. Such movements and movements do not add value to the final product and are therefore simply useless.

Inventory related costs. Excess inventory deadens working capital and also requires additional storage costs. The reason for their occurrence is the shortcomings of needs planning, the tendency to purchase "in reserve", the presence of "illiquid assets". For example, in one company it was planned to create a subsidiary household plot, for which the appropriate inventory was purchased, but the project was frozen, and considerable stocks lay in the company's warehouses for a long time.

Costs due to over-processing. The latter means adding products of such properties and qualities that are not in demand by the consumer and for which he is not ready to pay. For example, why sell gilded teapots, if ordinary ones can boil water perfectly? The example, of course, is very conditional, but it conveys the essence of the problem.

The costs associated with waiting, that is, in fact, with downtime in work. Downtime for the enterprise is a lost profit. They arise for various reasons, such as the optionality of external and internal suppliers, lengthy equipment changeovers, repair work on equipment, poor planning of production capacity utilization, etc. So, at the enterprise, the main product of which is pasta, it was necessary to periodically stop the production line due to the fact that the warehouses of finished products were completely filled.

To eliminate or minimize each of the listed types of unproductive costs, various methods are used depending on the cause of the losses. Approaches to reduce unproductive costs are presented in table. 1.

Forming a cost reduction program

The next step in reducing costs should be the development of a program of measures that will achieve such a reduction. The general sequence of actions in the formation of such a program includes several stages.

1. Collection of data on the cost structure of the enterprise.

At this stage, data are collected on the current and historical state of costs (cost items and their value) of the company. As a rule, the necessary information is available in the departments involved in economics and planning: PEO, budget control department, etc. Moreover, it is desirable that the information come from sources not only of accounting, but also of management accounting, since in the latter it is usually presented in a more complete and adequate analytical form. The best option is to use the data of the budgeting system, if available. It is advisable to collect historical information on costs for at least three years, quarterly, and preferably monthly, and adjust for inflation.

2. Analysis of the obtained cost data.

At this stage, first of all, changes in costs over time are examined. Thus, it is possible to study the seasonality of changes, as well as analyze the influence of various external and internal factors on the amount of costs (to identify correlations). The costs are then ranked in order of magnitude. Finally, it is necessary to determine the degree of cost controllability. Managed costs are understood as costs, the value of which the company can influence to some extent (with a given production program). Thus, it is unlikely to be able to influence the cost of raw materials produced by a limited number of suppliers. But it is possible to manage personnel costs. Of course, it makes no sense to consider unmanageable costs in the future for their reduction.

3. Identification of promising areas for cost reduction.

Promising areas for reducing costs are items that are the largest in absolute terms and at the same time manageable.

It is necessary to analyze how the reduction in costs will affect the overall performance of the company. For example, a significant reduction in personnel costs without changing the technology of work will cause dissatisfaction among employees and can “wash out” the most effective personnel from the company. And without qualified personnel, the company simply will not be able to work.

So, in the course of analyzing the current situation with the organization of labor and wages at enterprise “B”, it was found that, despite the low level of average wages of employees (15 thousand rubles), its growth rates in January, April, May, June 2007 ahead of the growth rate of labor productivity. This indicates the inefficiency of production due to low volumes, excessive headcount, as well as regular unreasonable payroll expenses in the form of various payments for underloaded personnel: payment for night work (up to 118 thousand rubles per month); payment under a work contract (up to 131 thousand rubles per month); overtime pay (up to 66 thousand rubles per month); payment for work on weekends and holidays (up to 290 thousand rubles per month); payment for combination, replacement (up to 160 thousand rubles per month).

At the same time, the analysis showed that work in shifts is organized irrationally: shift schedules are compiled without taking into account the real workload of personnel and they deliberately include overtime, the total duration of which reaches 40% of the planned working time fund (while according to Article 99 of the Labor Code RF overtime should not exceed 120 hours per employee per year). Moreover, the presence of regular (monthly) overtime was explained not by production necessity, but by the desire of the heads of structural divisions to increase the wages of subordinate workers (overtime is paid at a double rate, and a bonus is charged on it). For the same purpose, work at night was specially planned (they are paid at an increased rate - by 40% of the salary (tariff rate)).

Based on the analysis of the above data, the following directions for reducing costs were proposed. In accordance with the calculations, a 50% reduction in the costs of these payments will save an annual payroll in the amount of 4.5 million rubles. However, in order to maintain (and, in some positions, increase) wages, the exclusion of unjustified payments from the payroll must be compensated by an increase in the constant (salary) or variable (bonus) part of the payroll. Such measures will entail an increase in the competitiveness of jobs, the interest of staff in working with greater intensity with a smaller number. It is expedient to raise the level of wages by means of a rational organization of labor—optimal placement of personnel, taking into account the incoming workload.

4. Development of measures to reduce costs.

Once the most promising areas for cost reduction have been identified, it is necessary to study how costs are formed in each area, how business processes flow, and understand what should be done to reduce costs. It is advisable to involve heads of departments, external experts and consultants in this work, who, based on the information collected, will be able to offer several alternative ways to solve the problem.

So, during the analysis of data on the production marriage of finished products, carried out for a group of pasta factories, it was found that one of the main reasons for the occurrence of an inevitable marriage is the so-called starting marriage. It is due to the fact that drying chambers require a certain time (up to 2 hours) to fully reach the required drying mode. Defective finished products are recycled, however, electrical energy is additionally consumed. This means that by reducing the scrap rate, businesses will reduce their energy costs.

In addition, during long shutdowns, production lines must be cleared of dough residues (estimated up to 200 kg of dough, or about 160 kg of flour). This dough is non-recyclable waste. Therefore, by minimizing the number of changeovers of production lines, it is possible to minimize the technological defects of products and, accordingly, costs.

In particular, reducing the number of equipment changeovers by only 1 time per month for each line will save about 250 thousand rubles in all three factories. in year. And a 50% reduction in the level of manufacturing defects will make it possible to reduce electricity consumption by approximately 565,000 kW per year.

Thus, the reduction of costs due to a high level of manufacturing defects should occur through the following measures:

• reduction in the number of changeovers of production equipment;
• timely cleaning of production lines;
• compliance with the order of assortment without abrupt transitions of technological parameters of the production process;
• exclusion of regrading in finished products (cleaning of bunkers).

Proposed measures to reduce costs are distributed according to the cost of their implementation into three groups: cost-free, low-cost and high-cost. The first group includes activities for which the company's funds are not spent or the costs are so insignificant that they can be neglected. An example of a cost-free measure is to reduce the receipt of defective products by strengthening the input control over the supply of spare parts and materials. The criteria for classifying events as high- and low-cost activities are set by the company independently. A high-cost measure will be, for example, the reconstruction of high-voltage power lines with the transition to another type of wire, which will allow several times to reduce the loss of electricity in the networks. An example of a low-cost measure is the installation of devices for automatically switching on and off the lighting of workshops and the territory of a thermal power plant, depending on the illumination.

Measures are also evaluated in terms of the expected economic effect of their implementation. Obviously, at this stage, the estimate will not be very accurate. It is necessary to strive to ensure that the error is within 10% - this degree of accuracy at the first stage will be enough. From the formed list of activities, those are selected that, according to preliminary estimates, will bring the greatest economic effect.

5. Detailed study of activities as investment projects.

At the final stage of the formation of a program of measures to reduce costs, the most promising of them are evaluated approximately according to the same methodology as any investment project. For each event, the NPV (Net Present Value) indicator is calculated. The input flow is the amount of savings on costs in the period, the output flow is the amount of costs for the project implementation in the period. The event is included in the program if NPV > 0.

In the future, the cost reduction program is submitted to the top management of the enterprise, which makes the final decision on the implementation of the presented measures.

We will give the force of a document binding for execution

The cost reduction program should be formalized as an internal regulatory document - this will emphasize its importance for the enterprise and give it the status of an act that is mandatory for execution.

The structure of such a document should include the following sections:

• list of measures to reduce costs: brief essence (name) of the measure; the period of its implementation; the amount of implementation costs; economic effect of the event;
• explanatory note to the list of measures: data from the analysis of the enterprise's activities; a brief justification for the choice of a particular event; model for calculating the economic efficiency of the event;
• action plan of officials for the implementation of each event (if it is not quite elementary): detailed tasks; terms; responsible for the event as a whole and for the implementation of individual tasks within its framework; resources needed for execution - personnel, equipment, etc.

As an example, in Table. 2 shows a part of the list of measures to reduce costs for the food industry. The numbers in the table are conditional.

Ensures implementation success

Each activity included in the cost reduction program will be unique in the sense that it is tailored to the conditions of a particular enterprise. Accordingly, the process of implementing such a program will also be unique. Therefore, it is almost impossible to offer universal recipes for success. Nevertheless, there are factors that largely determine the effectiveness of the program that need to be taken into account.

Let's call these "components of success":

1. Qualitative planning of a cost reduction project, including a mandatory assessment of the economic efficiency of cost reduction measures.

It is very important to pre-evaluate the economic effect of the activities and comprehensively analyze the data obtained. Particular attention should be paid to high-cost activities. Otherwise, there is a risk of spending certain resources without getting the desired result.

2. Principality in the implementation of changes by top management.

The abyss, as you know, cannot be jumped over at 99%. If changes have already begun, it is extremely important to bring them to the end. Half-hearted decisions will only harm the enterprise.

3. Explaining the need to reduce costs, the benefits of the steps taken to the staff, obtaining the support of key employees.

Reducing costs is an unpopular measure, and therefore it is necessary to convey to the staff that "everyone is sailing in the same boat." Indeed, often the price of the issue is the existence of the enterprise itself. It is not machines and assemblies that work - people work, and the results of their activities depend significantly on their motivation.

4. Reliability of funding sources for activities whose implementation requires investment.

Here, perhaps, you can not comment too much - during the current financial crisis, everyone understands what interaction with unreliable financial sources can result in. On the other hand, the crisis, to put it mildly, is not the best time for a large-scale reconstruction of production. Therefore, most likely, low-cost measures to reduce costs will be mainly implemented.

The successful implementation of the cost reduction program and the establishment of a mechanism for regular cost optimization will allow the company to survive the crisis and gain competitive advantage in a more stable environment.