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The main ways to reduce costs include: · improving the design and technological characteristics of engineering products to reduce their capital intensity, material intensity and labor intensity; Improving the use of fixed assets and working capital; · growth of labor productivity; Improving the organization of production and labor. The choice of ways to reduce costs is based on the classification of reserves and knowledge of the factors that provide conditions for reducing certain types of costs and costs in general. The reserves for reducing the cost of machine-building products are an objective opportunity to reduce them at enterprises (in associations), in the industry. Comparison of the cost of production with its indicators at advanced enterprises gives an idea of ​​the size of these reserves.

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Reducing the cost of production. The cost price is the sum of all costs that were spent on the production and promotion of goods on the market.
The cost price is always expressed in monetary terms, contains an estimate of the cost of a unit of the product and refers to the costs of the enterprise.
Any textbook on the world economy will give a long list of measures to reduce the cost of production: increasing labor productivity; introduction of modern technology, automation of all work processes; expansion of specialization; cooperation, consolidation of enterprises; compliance with the economy mode in all areas; saving raw materials, materials, fuel, energy; the right choice of partners, carriers, suppliers of raw materials; technology improvement; reduction in the cost of maintaining the administrative apparatus; reduction of losses from marriage; regular market research, modern ways to promote products.

How to cut business costs

In some cases it is useful to increase them.

• The "Rule of Efficiency" - each cost unit should bring the maximum result, or - to achieve the result, it is necessary to minimize the costs.
• Costs arise, as with any action, and with inaction.
• You don't have to be a maximalist.
  Even a minimal reduction in costs or keeping them at the same level is a good result.
• There are no trifles on the way to cost optimization.
  Accept that you will be called a bore and paranoid.

  Require employees to save paper, electricity, water, etc.

  Accustomed to saving on trifles, subordinates will begin to carefully treat large-scale costs.

• Costs cannot be reduced without spending a dime on it.

Article 264. Other expenses associated with production and (or) sale

Material costs, as you know, in most industries occupy a significant share in the structure of production costs, therefore, even a slight saving of raw materials, materials, fuel and energy in the production of each unit of production in the whole enterprise has a significant effect.

The enterprise has the ability to influence the value of the cost of material resources, starting with their procurement.

Raw materials and materials are included in the cost price at the price of their purchase, taking into account the cost of transportation, so the correct choice of material suppliers affects the cost of production.
It is important to ensure that materials are received from such suppliers, which are located at a short distance from the enterprise, as well as to transport goods by the cheapest mode of transport.

Other accounting expenses are...

If you manage only payments, soon the enterprise will begin a chronic shortage of funds, and if loans are actively attracted, then bankruptcy is not far off. The effectiveness of cost reduction depends on how both expenses and revenues are recorded. And both of these articles need to be planned in advance. It is desirable that the manager always has before his eyes the planned volumes of income and expenses, broken down by months, quarters, years.

Some investment projects may seem costly in the short term, but very profitable in the long term.

Control The manager must have objective, not embellished, information about his enterprise.

The ability to control costs appears from the moment they are taken into account.

• There are useful costs that can save you from big losses (insurance, security, quality improvement).
• Cost analysis and optimization is a race without a finish line. This work has no end date, it is daily, systematic, routine.
• All employees must fight costs, but each one must be given an individual “combat” task.
• Going on the "warpath" with extra expenses, arm yourself with a pencil, paper, calculator and distrust. Any noticed inefficiency or an idea flashed through your head to eliminate it should be stored not in memory, but on paper. Do not trust employees who do not back up their words with numbers, and if they do, then the numbers need to be checked. In the fight against unnecessary costs, the paranoid win.

National economic reserves (the establishment of more progressive national economic proportions in the structure of industrial production, in the development of science and technology; the rational distribution of machine-building enterprises; a reduction in the cost of transporting goods and a reduction in oncoming traffic). Under the factors of reducing the cost of engineering products understand the factors that allow the use of reserves. They are divided into national economic, sectoral and intra-production.

The national economic and sectoral factors include: 1) improving the use of natural resources; 2) change in the composition and quality of natural raw materials; 3) commissioning and development of new enterprises and industries; 4) preparation and development of production at existing enterprises; change in the location of production.

Internal factors include the following: