Other methods of cutting costs

As well as improving productivity, a business can cut costs by:

Cost cutting methods can include improving management, reducing overheads, relocating the business or redesigning the product
  • Reducing overheads such as administration, eg making some support staff redundant. Customer service may suffer as a result of this.
  • Relocation to countries where staff with appropriate skills can be hired at lower wages.
  • Improving management so staff are motivated to work harder, or are better used.
  • Redesigning the product so an item is easier and cheaper to make.

Lean production is a set of measures that aim to reduce waste during production. Waste reduction methods, such as just in time ordering of stock, will increase efficiency.

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