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over the four year budget planning period. In order to meet the challenges of a significant reduction in expenditure, government departments are expected to look at how they can "take cost out of the business" rather than simply cut services. One of the main principles expected of government
262:
departments in order to reduce costs is a "data-driven approach", i.e. ensuring that staff within the department have "a good understanding of the distribution and profile of costs in their business".
111:
numbers (head count). Doherty refers to staff reduction exercises as "a quick and easy method" whose use often means that companies lack the resources they need when business activities recover.
276:, of "Excellence in Business", note that in most cases, a successful approach to cost reduction which aims to maintain service quality "has at its heart an approach based on the principles of
153:(ABC), which assigns a cost of each activity undertaken in the production and delivery of each product and service according to the actual consumption by each activity including a share of
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which it holds on the estate: Deloitte's survey of
British companies noted that "smaller firms in particular" rarely take advantage of the cost reductions they can secure through
99:
listed companies had commenced a cost reduction programme during the preceding 12 months. Cost reduction is most frequently stimulated by recognition that profits and
257:, an overall target for reduction in expenditure may be identified: for example, in the United Kingdom, the 2010 spending review anticipated a reduction of £81bn in
424:
Forey, Gail, and Jane
Lockwood. Globalization, Communication and the Workplace: Talking across the World. New York: Continuum, 2011. Electronic Book #21-26.
341:
412:
280:": a fundamental review of the whole service, its purpose and objectives. The "Route Map for Change" which they advocate has been used effectively by
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process affects cost: design is typically considered to account for 70–80% of the final cost of a project such as an engineering project or the
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229:: experience in the United States suggests that businesses primarily outsource to reduce peripheral and "non-core" business expenses.
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455:
451:
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Apichart
Jearasatit. "Using a total landed cost model to foster global logistics strategy in the electronics industry".
325:
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Examples specifically focussed on the use of suppliers and the costs of goods and services supplied include:
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Half cost strategies: ambitious strategies which aim to reduce the costs of specific production processes or
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Companies typically launch a new product without focusing too much on cost. Cost becomes more important when
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becomes a differentiator in the market. The importance of cost reduction in relation to other strategic
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contract, while the decommissioning of various warships and aircraft squadrons following the UK's
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Barrett R. Crane. "Cycle time & cost reduction in a low volume manufacturing environment".
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Bryan K. Parks. "Cost and lead time reduction in the manufacture of injection molding tools".
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excellence and the product cost information needed by managers working towards this goal.
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activity has been hightlighted as a beneficial public sector cost reduction strategy.
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157:. Peter Turney, in a 1989 article, examines the role of ABC in the achievement of
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Design determines 70% of cost? A review of implications for design evaluation
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The cutting edge: Sound advice for a sustainable approach to reducing costs
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occupied by a business continues to meet its needs, and also reviewing the
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54:, cost reduction programs can be used where income is reduced or to reduce
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458:, reference 009328-001, published June 2010, accessed 13 February 2024
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AstraZeneca CIO Makes IT Twice As Good At Half The Cost - Here Is How
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in 2010 is seen as a good example of a strategic option appraisal.
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92:
315:, Journal of Engineering Design, Volume 12, published 1 March 2001
415:, Forbes.com, published 3 January 2017, accessed 10 January 2021
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are below expected levels. Some examples of programmes include:
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34:, or to accommodate reduced income. Depending on a company’s
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Incorporation of "low-cost thinking" into an organisation's
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is the process used by organisations aiming to reduce their
396:
Activity-Based
Costing: A Tool for Manufacturing Excellence
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23:
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A smarter approach to cost reduction in the public sector
328:, last updated 15 August 2021, accessed 11 September 2021
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Brown, S., Hadden, C., Jones, K. and Roddie, R. (2010),
361:, published 31 January 2018, accessed 12 September 2021
437:, published 20 October 2010, accessed 13 February 2024
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Examples of cost reduction strategies and programmes
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Spending Review 2010: George
Osborne wields the axe
402:, published summer 1989, accessed 13 September 2021
178:Property portfolio reviews addressing whether the
95:reported in 2006 that over three-quarters of the
42:, the strategies can vary. Every decision in the
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326:Cost control in building design and construction
503:
344:, published 8 June 2018, accessed 19 April 2024
16:Process used by organisations to reduce costs
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474:, published by Excellence in Business, p. 5
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456:A Short Guide to Structured Cost Reduction
472:Radical Cost Reduction in Public Services
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400:Association for Manufacturing Excellence
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355:Growth trumps cost cutting, says survey
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203:stages to 1/N of the previous cost.
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217:aerospace manufacturing industry
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324:Designing Buildings Wiki,
222:Low-cost country sourcing
290:Strategic Defence Review
240:cost breakdown analysis
170:Competitor benchmarking
114:Component consolidation
338:McKinsey & Company
233:Request for quotations
215:: see examples in the
151:Activity-based costing
131:Design for manufacture
118:Function cost analysis
50:of a building. In the
452:National Audit Office
87:Commercial businesses
286:highway maintenance
282:Kent County Council
253:In a public sector
135:Design for assembly
44:product development
545:Potential analysis
265:Centralisation of
259:public expenditure
190:and similar deals.
188:sale-and-leaseback
78:is often debated.
359:Supply Management
126:Value engineering
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48:construction
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353:Green, W.,
267:procurement
227:Outsourcing
145:Cost driver
68:competition
555:Efficiency
523:MIT DSpace
506:MIT DSpace
489:MIT DSpace
433:BBC News,
411:High, P.,
385:, Deloitte
296:References
284:for their
62:Importance
238:Supplier
211:Supplier
155:overheads
564:Category
539:See also
381:(2006),
164:Product
147:analysis
97:FTSE 100
93:Deloitte
58:levels.
40:products
36:services
28:increase
195:culture
32:profits
379:et al.
184:tenure
180:estate
30:their
570:Costs
309:et al
274:et al
235:(RFQ)
109:staff
72:price
24:costs
56:debt
26:and
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510:hdl
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38:or
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