Improving productivity and reducing costs are now a priority for all companies to remain competitive. This priority should not mean an indiscriminate cutting of resources within a company, but approach it from a strategy to improve competitiveness and productivity, not worsen the quality of their products or services. Generally, one of the most frequent actions in determining the cost reduction is the dismissal of staff. However, this is not always a good measure because it has a series of negative effects: disagreement in the working environment, reduction in productivity and quality, higher staff turnover, disruption of the learning curve and potential costs for contract of new employees as necessary.
Cost reduction should be approached from a systemic approach, including the intimate interplay between the various components of both manufacturing processes and the organizational structure. The reduced cost means to detect, prevent and eliminate the excessive use of resources. Decisions and actions taken by the owners and managers of a company must be first and fundamental objective to achieve the greatest net present value of the future stream of income for the organization. This involves the pursuit of sustained yield in the medium and long term as opposed to the search for revenue in the short term.
There are several methods to reduce costs and improve productivity, but we can take into account some considerations that can be implemented:
Improve the quality, it generates as a result of fewer errors, defective products and repetition of work, thus shortening the total cycle time and reducing resource consumption and the cost of operation. The quality of products and services generate greater customer satisfaction and thus greater fidelity to the company. This can translate into increased sales and a better image of the company, which in turn helps increase the brand value of products and the ability to generate future revenue.