vikram chawla
Vikram Chawla
Materials are needed to be well managed in the organization. There are various method for getting the materials at the right price.
Negotiation is one of the techniques to reduce the cost. It is a skill that can be learned through experience and practice. Those who negotiate regularly are much more skilled. Negotiations can help obtain a fair and reasonable price for the materials. It helps in reaching a price that the buyer views as reasonable for the function to be performed and yet which is fair in relation to the producers cost and risk.
Other than negotiation, there are various other methods for reducing cost, that can be divided into two types …
-Technical methods
-Non technical methods
Technical methods…
Methods which deal with the product change and also the items going into those are the technical methods. It results into the savings of direct material and labour expenditure. Some of the technical methods are as follows:
Design changes
Specification changes
Change of manufacturing process
Improving product quality
Techniques like value engineering lead to product change
Non technical methods…
Methods which deal with reduction in other expenses directly or indirectly involved related to the product are called non technical methods. It results into savings in the type of overheads and make changes in systems and methods in company. Following are the non technical methods:
Inventory reduction
Variety reduction
Brain storming
Codification
Purchase of materials that reduce labour cost.
Negotiation is one of the techniques to reduce the cost. It is a skill that can be learned through experience and practice. Those who negotiate regularly are much more skilled. Negotiations can help obtain a fair and reasonable price for the materials. It helps in reaching a price that the buyer views as reasonable for the function to be performed and yet which is fair in relation to the producers cost and risk.
Other than negotiation, there are various other methods for reducing cost, that can be divided into two types …
-Technical methods
-Non technical methods
Technical methods…
Methods which deal with the product change and also the items going into those are the technical methods. It results into the savings of direct material and labour expenditure. Some of the technical methods are as follows:
Design changes
Specification changes
Change of manufacturing process
Improving product quality
Techniques like value engineering lead to product change
Non technical methods…
Methods which deal with reduction in other expenses directly or indirectly involved related to the product are called non technical methods. It results into savings in the type of overheads and make changes in systems and methods in company. Following are the non technical methods:
Inventory reduction
Variety reduction
Brain storming
Codification
Purchase of materials that reduce labour cost.