Other methods of cutting costs
As well as improving productivity, a business can cut costs by:
- 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.