Cost Management Techniques and Tactics. COST MANAGER'S TOOLKIT

Here are some point summary on:

COST MANAGEMENT TECHNIQUES AND TACTICS

COST DYNAMICS
?    Understand what creates cost.
?    And what your key cost trends are.
?    And how costs move in relation to decisions and activities, in particular how they move with revenue and headcount.
MANAGEMENT ACCOUNTS
?    Produce management accounts that let you understand, model and manage the true economics of the business.
?    Is the presentation as crisp as Elmore Leonard's dialogue?
BANG FOR BUCK
?    Focus on where to get the biggest results fastest.
SLICE AND DICE
?    Get at difficult costs by slicing and dicing.
?    Unbundle activities.
?    Map them against different customer segments.
PUSHING WATER DOWNHILL
?    Understand natural cost trends.
?    Don't fool yourself you are pushing water downhill.
?    Don't expect to push water uphill.
FOCUS ON CASH COST NOT P&L COST
?    Particularly in a cash crunch.
BEST PRACTICE
?    Regularly look for best practice across the organization.
?    Take opportunities to do experiments and comparisons.
COMPETITIVE ANALYSIS
?    Check competitors' cost positions and their cost trend. Have they found more cost-effective ways of working?
?    Make sure you distinguish structural cost differences from operational execution.


COST MANAGER'S TOOLKIT

DELIVER VALUE VIA ACQUISITIONS
?    Most acquisitions don't add value, but a strong cost manager has a much better chance of doing so.
?    Cost-based synergies are better than revenue- or scope-based ones.
UNDERPIN PRICING STRATEGIES
?    In price wars - for market leaders and market attackers.
?    In new product introductions - pricing down the experience curve.
?    In long-term customer contracts - making profitable commitments.
DISCOVER MORE NEW GROWTH OPPORTUNITIES
?    Drive down the cost of discovery.
?    Retain more equity value.
CREATE AN EFFECTIVE CENTER IN A LARGE CORPORATION
?    Make decentralization the default position
?    Establish a clear supplier-customer relationship between the center and the business units.
?    Be particularly hard on center cost creep.
?    Establish and track hard metrics around center efficiency.
?    Do annual private equity-type reviews that challenge the center.

Cost Management Techniques and Tactics. COST MANAGER'S TOOLKIT