Hello, this is Boge Consulting, and it's the season to set up the second year's budget and career plan every year. For the person in charge of the purchasing department who reduces the purchasing cost by at least 5% every year, there is almost the idea of jumping off a building. For large enterprises, the task of cost reduction can be directly pushed to the first-tier suppliers, but the first-tier suppliers are also simple, and the tasks are pushed to the second-and third-tier suppliers intact, so there is always a limit to the downward shirking. What can the company that receives the last one do? But no matter how much you worry about how to reduce costs, the cost reduction behavior of each enterprise is getting deeper and deeper. In the realistic environment where various tax rates are rising and the cost of raw materials continues to rise, it is even more necessary to save every penny to survive. And everyone thinks that reducing manufacturing costs is the most direct contribution to the growth of corporate profits compared with increasing sales. For example, Toyota and Samsung all think that "compared with other management improvement methods, cost saving has the most direct and distinct effect on improving the overall competitiveness of enterprises" and "cost saving is the driving force to overcome the harsh market environment".

As we all know, cost saving is not so easy to achieve. Over the years, many cost management methods have appeared, which have been applied in many enterprises and achieved good results. But now, the problem that most enterprises are facing is that the improvement methods and countermeasures of visible cost have all been applied. Although we are still trying to make continuous improvement with the old methods, the effect is becoming less and less obvious. It's time to introduce more effective cost-saving methods, as a domestic production director said: "I'm dreaming about how to reduce costs, and I'm willing to mobilize all my energy to launch a super war for cost reduction."

boge consulting often uses the following three methods in lean cost management consulting activities: "new procurement cost reduction method", "research and development and business cost reduction method" and "energy and logistics comprehensive cost reduction method".

first, the new procurement cost reduction method of Boge Consulting

Without the cost reduction of the procurement department, the comprehensive cost of the enterprise is not competitive. According to McKinsey's statistical analysis, the effect of saving 1% on purchasing expenses is the same as that of reducing inventory by 1% or increasing sales by 3%. In the lean cost management promoted by Boge Consulting, TCO(Total Cost of Ownership) is the most commonly used method to reduce the procurement cost. This method is a new procurement cost reduction method proposed by Boge on the premise that the effectiveness of cost reduction in bulk procurement and strategic procurement is limited.

TCO mainly includes three aspects, namely

a) procurement

The core element to solve is the purchase unit price. Frequently used methods are to guide effective competition mechanism, large-scale procurement, introduction and application of new materials, etc.

b) The core elements to solve internal expenses

are transportation expenses, warehousing expenses, inventory expenses, procurement management expenses, and internal input-output ratio of factories. Frequently used methods include canceling invalid inspection activities, sharing information smoothly between departments, reducing working procedures through continuous shortening of production cycle, improving inventory turnover rate, resetting safety inventory, etc.

c) The core elements to solve the combined expenses

are the opportunity loss expenses caused by R&D expenses, product loss expenses and product specifications. Commonly used methods include integrated procurement of two-tier suppliers, participation of supplier R&D personnel in product R&D process, improvement of supplier's production efficiency and quality ability, etc.

II. R&D and business cost reduction methods of Boge Consulting

Although the cost savings are all started from the scene, the cost savings of R&D and business departments are the biggest contribution to the overall cost savings of the enterprise. If the cost introduction effect is divided into parts, 8% of the cost will be completed by postgraduate entrance examination, because the so-called cost has been determined in the product development stage.

Jin Xuejun, the chief consultant of Boge Consulting, said, "In the past, most enterprises classified R&D costs and business costs as Hidden cost, but in recent years, more and more enterprises have focused on R&D". In lean cost management, Boge Consulting adopts DTC(Design To Cost) to save R&D cost. The characteristic of this method is to cut into product design for the purpose of cost reduction from the initial stage of research and development. We often compare our competitors' products with ours after completely decomposing them, and look for the Idea of cost reduction.

third, the comprehensive cost reduction method of energy and logistics of Boge Consulting

The price of oil futures has been rising continuously, the global logistics cost has been increasing continuously for many years, and the domestic energy cost has increased by at least 1% in the past decade. In addition to the changes in management methods, Boge Consulting strongly recommends that our customers adopt new energy-saving technologies.

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