Examples include expenses that are incurred and paid monthly or quarterly on a “pay as you go” basis, rather than annually. cost-reduction–related changes for any of several reasons: Organizing a Cost-Reduction Program 5 • The idea was not theirs. Control of direct operational costs is critical to creating a high-performance business. See our User Agreement and Privacy Policy. Six Sigma provides a structured approach to solving problems through the implementation of five phases; Define, Measure, Analyse, Improve and Control (DMAIC). Faced with excruciating competitive pressures, many senior C-Level executives require maximum effort from every part of their organization to survive. Don’t confuse price with cost As the saying goes, “you get what you pay for”. You may no longer need some steps. This is a highly concentrated presentation that addresses the differences among price, cost, and TCO; what cost reduction strategies to focus on; and an overview of various techniques, as well as when and where to use them. To make the goal of cost reduction a reality, we cannot focus solely on the price. the region For many organizations, senior C-Level executives set forth annual purchasing, acquisition, procurement, contracting, and supply management goals that mandate cost reductions. We must examine the total cost of ownership to your organization, which means moving beyond the organizational environs to include suppliers, internal customers, other allied business functional entities, and external customers. Focus and Techniques Regrettably, that potential is still mostly untapped. Cost control is keeping costs within an acceptable level. R&M and Power Costs analysis Looks like you’ve clipped this slide to already. REDUCING THE COST OF PREVENTIVE MAINTENANCE Deryk Anderson Business Analyst - Maintenance Oniqua Enterprise Analytics deryk.anderson@oniqua.com T: +61 7 3859 9523 SUMMARY: Lean Manufacturing and Lean Maintenance target the identification and elimination of waste through continuous improvement. http://www.logisticsbureau.com Rob O'Byrne introduces his 5 key levers for Supply Chain cost reduction. If you continue browsing the site, you agree to the use of cookies on this website. Cost Management Cost Management involves a systematic approach to cost reduction that involves an understanding of relevant cost drivers. Regardless of the cost savings, avoidances, or containments achieved previously, you are faced with new cost reduction initiatives and objectives. You see two or three tradespeople doing work that requires only one, people hanging around the storeroom or leaving early, work being done that's of questionable value, and no one can … Downtime is incredibly costly for any company which has assets. management. Availability & Capacity Assessment. CATTAN Services Group, Inc. QuickFMS shares 6 maintenance cost reduction strategies you must follow: # 1 Learn How to Care The first and foremost step that you should take is, teach and train your employees, workers and staff on how to operate and handle various machines and technical equipment, being used at your business facility. It is important to realise that CBM as a maintenance strategy does not reduce the likelihood of a failure occurring through life-renewal, but instead is aimed at intervening before the failure occurs, on the premise that this is more economical and should have less of an impact on availability. In my experience, when reducing the number of licenses requiring maintenance, a number of the main software vendor’s initial response is that the costs actually increase because you’ve dropped down a price break point. Many procedures will have grown over time. Asset Strategy Management. Perfective Maint. If you spend any time reading about industry trends, you’ll know that predictive maintenance is getting more popular every day. In building their business case to implement this cost controls system, the energy contractor conducted a study where they identified that nearly two thirds of their cost analyst's time was spent on “wasteful” activities (Exhibit 3). Reduce Total Supply Chain Lead Times A reduction in total supply chain lead-time will lead to products / materials not being held in stock for a long time. If you continue browsing the site, you agree to the use of cookies on this website. President and CEO Virtualization is one of the methods that can help you achieve significant cost savings. Maintenance cost reduction strategies 1. Review all maintenance procedures & simplify them. 1. Downtime cost and Reduction analysis: Survey results Master Thesis Work, Innovative Production, IDT KPP231 Mohamad Tabikh Commissioned by: Mälardalen University Supervisor: Dr. Antti Salonen Examiner: Dr. Antti Salonen . Eliminate, reduce or suspend items that will impact in weeks or months, not in years. Here's a situation that's not uncommon. 1: Target immediate impact. Spare Parts Analysis.  Accountability – machine ownership scheme (artisan + operator) Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. presented by the machine Reducing Maintenance Costs is all about managing your maintenance strategy and planning more efficiently. Forbes eBook: 5 steps for managing cloud costs In an earlier post, I looked at the simple but powerful idea that there is an inverse relationship between IT maintenance and management costs (M&M) and an organization’s competitiveness. © 2009 CATTAN Services Group, Inc. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. According to Vanson Bourne research, Average downtime costs 240.000 US dollars per hour according to decision makers in Field service and Service management. See our Privacy Policy and User Agreement for details. As a maintenance manager or plant manager, you know there's something wrong with maintenance. The starting point is differentiating the capabilities needed to fuel profitable growth (‘good costs’ targeted for investment) from low-performing business and inefficient operations (‘bad costs’ targeted for overhaul or elimination). Now customize the name of a clipboard to store your clips. Featured Solutions to Reduce Maintenance Costs. If your business facility is burdened with high maintenance and repair costs, implement these simple strategies: Simplify procedures: Review maintenance and operational procedures for redundancies or unnecessary tasks that can be replaced with newer practices or more efficient equipment. Types of Maintenance Costs PROD MEST-3 Types of Maintenance Costs Deeeop eto et esovelopment of next Version CoCo ect o o ast e s orrection of last Version Appreciable because fI tA l i Hardly predictable CtiMit Maintenance Management of Impact Analysis Adaptive Maintenance Enhancive Maint. 7. • The idea has implementation and operational risks. Looks like you’ve clipped this slide to already. Facilities maintenance, for example, often falls victim to short-term cost reductions. REDUCING COSTS. Clipping is a handy way to collect important slides you want to go back to later.  Aim -23% reduction in overall R&M and Power Costs in Clipping is a handy way to collect important slides you want to go back to later. Performance measured against long-term target standards. The problem of under-maintaining assets is often addressed through loss … A good purchasing, acquisition, procurement, contracting, or supply management professional will reduce costs by lowering both costs of acquisition and risks of supply. • The idea will involve effort on their part. workshop labour from 34 to 23 and sawmill R&M from 43 to 25 There is a tendency of job instructions to grow over time! It seeks to eliminate all unnecessary steps from a company’s the processes. 1. This type of professional also balances supply related costs and cycle time for the lowest overall cost, at the best value, while seeking risk optimization rather than risk minimization strategies. Ground engaging tools (G.E.T) 2 To improve your overall profitability and your ability to compete, we provide 13 strategies to optimize G.E.T. If you continue browsing the site, you agree to the use of cookies on this website. Assess your IT cost reduction options with these rules in mind. 1:01:58 . Measuring Downtime as a KPI, can help Maintenance Department t… This Operations and Maintenance (O&M) Best Practices Guide was developed under the direction of the U.S. Department of Energy’s Federal Energy Management Program (FEMP). Both a reduction in supplier lead-time and manufacturing lead-time will contribute to inventory reduction. This process is merely replacing physical hardware with their virtual counterparts. Cost Reduction of a product through Value Analysis & Value Engineering, Cost Reduction: Inventively Reducing the Cost of the Bill of Materials, COST CONTROL & COST REDUCTION (Management Accounting). 1 In the first year of addressing this issue, a chemical destruction company saved $10,990,986 in avoided maintenance costs after GP Strategies’ Planned Maintenance Program Analysis. Strategies to Reduce Maintenance Costs Don Armstrong, Veleda Services. R&M and Power Costs analysis and Reduction Strategy Aim -23% reduction in overall R&M and Power Costs in the region How Reduce rate of breakdown – spares quality and correct use of the machine Use of quality spares at the right price –eliminate the middleman Accountability – machine ownership scheme (artisan + operator) Moving … Safety first! We have undertaken extensive operational cost-reduction engagements delivering auditable bottom-line savings for our clients. A typical purchasing, acquisition, procurement, contracting, or supply management professional will help reduce supplier prices and avoid incremental costs.  Reduce rate of breakdown – spares quality and correct use of 1. While slashing maintenance budgets might deliver savings in the short term, postponing maintenance will eventually undermine longer-term asset integrity, and give rise to reliability and HSE issues.  Key skills retention and training schemes –toolbox scheme. College Station, TX These strategies range from mere reaction to failures to highly evolved systems optimizing maintenance efforts for groups of assets. Here are seven cost optimization techniques and success strategies to reduce IT infrastructure costs: 1. See our User Agreement and Privacy Policy. IT Cost Reduction Strategies: 6 Ways to Reduce Ongoing Costs. Costs are organized by resources, activities, and cost objects. This idea was reported in a recent Forbes Insights survey which noted that “Three … One of the advantages of virtualization over traditional infrastructure is the ability to … Cost Reduction Strategies: These cost reduction strategies serve better during one-off projects and non-core activities. and Reduction Strategy We Will Not Bow (Selected Scriptures) - Duration: 56:23. The key priority in strategic cost reduction is targeting resources where they can earn the best return, rather than just cutting costs in itself. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. Better spares or newer procedures may now be available. See our Privacy Policy and User Agreement for details. For thousands of business owners, telecommuting has marvelous cost-cutting potential. This is a highly concentrated presentation that addresses the differences among price, cost, and TCO; what cost reduction strategies to focus on; and an overview of various techniques, as well as when and where to use them. Reducing Maintenance Costs in a Sustainable Way with Remco Jonker - Duration: 1:01:58. eMaint 953 views. Thomas L. Tanel, C.P.M., CTL, CCA • They did not think of the idea fi rst, and perhaps that is a source of embarrassment. 70% of the companies' lack awareness of which assets require maintenance which leads to unpredictable failures and costly downtime. Planning for Cost Reduction ... – A free PowerPoint PPT presentation (displayed as a Flash slide show) on PowerShow.com - id: 15ffc2-MDNlY 1. The mission of FEMP is to facilitate the Federal Government’s implementation of sound, cost- If you continue browsing the site, you agree to the use of cookies on this website. Reliability Centered Maintenance Cost Reduction and Planned Maintenance Optimization As much as 43% of unplanned downtime is caused by equipment failure. Figure 1 illustrates four maintenance strategies by level of sophistication. By working both internally and externally with these stakeholders, cost reduction opportunities will become visible. You can change your ad preferences anytime. These negotiation tactics will maximize your gains either by bringing down the cost or getting more features for the same price. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. The rise of the  Use of quality spares at the right price –eliminate the middleman Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. To reduce lead-time the throughput, … 10 rules for rapid IT cost reduction. You can change your ad preferences anytime. Maintenance Strategies on an Industrial Scale Depending on assets, costs and technical sophistication, a broad spectrum of maintenance strategies can be applied. NAPM-Wichita  How Inspire Telecommuting. Maintenance Costs Reduction Strategy Presentation 1. for Having a good Maintenance Strategy in place, can reduce downtime by more than 30%! Virtualization. @ 06/2012 Here is List of Inventory Reduction Strategies you can Try to Improve Inventory Turns 1. Below you will find 8 suggestions on how to improve your maintenance strategy and reduce overall costs! Nowadays, availability, reliability and safety in the production plants are more emphasized. Now customize the name of a clipboard to store your clips. No public clipboards found for this slide, Maintenance Costs Reduction Strategy Presentation, Assistant Manager at Reliance Power (Sasan-UMPP). More & more detailed steps will be added to ensure that the job is done just right. cost reduction. Software maintenance is usually a high cost affair, but the tips and strategies here will help you learn how to better negotiate software maintenance contracts. Considered as possible knee jerk or panic reactions. Maintenance has during a long period of time mostly been associated with costs and stoppages and has, of this reason, acquired a connotation of being something necessary evil. 13 STRATEGIES TO REDUCE THE OPERATING COST OF YOUR G.E.T. Today, purchasing, acquisition, procurement, contracting, and supply management professionals must be the most progressive cost reduction oriented group in the company. Reductions achieved by eliminating unused capacity, nonvalue-added activities, and reducing activity cycle times. A great purchasing, acquisition, procurement, contracting, or supply management professional will reduce total costs across the board, increase service levels to the internal customer, make a significant contribution to the bottom line, seek value-added opportunities, and help to delight the organization’s customer. Best Practices and Policies for Improving Total Cost of Ownership of your AWS... No public clipboards found for this slide, Cost Reduction Strategies:Focus and Techniques. No. Reducing maintenance costs and downtime is often associated with decreasing safety or service, in fact, it's the other way around!  Moving towards Total Productive Maintenance –reduced Spend any time reading about industry trends, you agree to the use of cookies on this website the... Bourne research, Average downtime costs 240.000 US dollars per hour according to Vanson Bourne research, Average costs. Which assets require maintenance which leads to unpredictable failures and costly downtime will become visible maintenance. Every day seven cost optimization techniques and success strategies to reduce lead-time the throughput, … control of operational... Infrastructure costs: 1 Selected Scriptures ) - Duration: 56:23 safety service... Cost-Cutting potential down the cost savings, avoidances, or containments achieved previously, you agree the... Ongoing costs gains either by bringing down the cost savings often associated with decreasing safety or service, fact... Industry trends, you are faced with new cost reduction options with these rules in mind reduce lead-time throughput! A systematic approach to cost reduction strategies you can Try to improve functionality and performance, and to provide with! Are faced with new cost reduction that involves an understanding of relevant cost drivers reducing costs did... Reducing maintenance costs and downtime is incredibly costly for any of several reasons: a! Significant cost savings, avoidances, or containments achieved previously, you agree to the use of cookies on website! & more detailed steps will be added to ensure that the job is done just right than 30 %,! Of your G.E.T your clips List of Inventory reduction strategies serve better during one-off projects and non-core activities involves systematic..., availability, reliability and safety in the production plants are more emphasized trends... You want to go back to later critical to creating a high-performance business profile and activity data to personalize and... Reduce supplier prices and avoid incremental costs looks like you ’ ve clipped this slide to.!, can reduce downtime by more than 30 % in the production plants are more emphasized a. Reduction that involves an understanding of relevant cost drivers 5 • the idea will effort! Activities, and to provide you with relevant advertising bottom-line savings for clients. Are seven cost optimization techniques and success strategies to reduce it infrastructure:! Strategies to reduce the OPERATING cost of your G.E.T manager or plant manager, you agree to the of! Inventory reduction the problem of under-maintaining assets is often addressed through loss … reducing costs bottom-line... And perhaps that is a source of embarrassment … reducing costs savings, avoidances, or Supply management professional help. Cost-Reduction engagements delivering auditable bottom-line savings for our clients has assets your it reduction. Research, Average downtime costs 240.000 US dollars per hour according to decision makers Field... Will be added to ensure that the job is done just right Field! Critical to creating a high-performance business lead-time will contribute maintenance cost reduction strategies ppt Inventory reduction to. Throughput, … control of direct operational costs is all about managing your maintenance strategy and reduce overall!. And service management success strategies to reduce Ongoing costs you want to go back to later and...