Cost Reduction

Most profitable companies now are highly focussed on reducing costs by bringing effective ways of improving productivity & process efficiency. As per Lean management & Kaizen, there are two key components of cost, i.e Cost of Value adding activities & Cost of Non Value adding activities (also known as Muda or Waste). To reduce the overall cost, first we must identify and reduce cost of all Non value adding activities.

Broadly all costs can be classified under cost of material, manpower, machinery & space.

  • If Materials costs are very high, we first must identify and reduce all material losses such as Yield loss, defects, spillages etc.
  • For Manpower cost reduction, an analysis of time spent by people on Value adding and Non value adding activities can reveal lot of opportunities for improving manpower productivity and reducing the labor cost by using various lean tools such as Line balancing, Standard work and Daily work management.
  • to reduce the machinery costs, all time lost in various OEE (Overall equipment effectiveness) losses must be identified and reduce using powerful tool of TPM (Total Productive Maintenance)
  • Space utilisation and cost reduction can be achieved by using tools such as Pull System, Kanban & 5S

Using Lean manufacturing, TPM and Kaizen tools can help to reduce costs by focusing on elimination of non value adding activities or MUDAs on the shop floor as well as in the processes & systems. Cost reduction using Lean, TPM & Kaizen tools can be achieved without making investment in any new technologies & machines.

RIB Consulting brings innovative cost improvement Kaizen tools to increase profitability. We follow a customised approach of cost reduction for each of its client that includes:

  • Study P&L of our client in detail

  • Identify key high costs elements

  • Conduct root cause analysis on Major issues & inefficiencies

  • Implement Corrective & Preventive actions for improvement

Our clients with implementation of Kaizen techniques, in association with our consultants, have managed to reduce their key costs by 30-40%. We leverage Lean Management and Continual Improvement Kaizen tools and processes through our proprietary RIB Model that will help reduce

Some of the powerful Kaizen tools implemented are:

  • Total Productive Maintenance (TPM) & Standard work to reduce material losses

  • Total Quality Management (TQM) to reduce rejections & improve quality

  • Energy Management to ensure effective energy consumption & minimise energy losses

  • Kanban, Inventory Management & Just-in-time (JIT) to reduce excess inventory & eliminate stock outs

  • Total Productive Maintenance (TPM) & Reliability Maintenance to increase machine output & Overall equipment effectiveness (OEE)

  • Line Balancing & Cellular Manufacturing to increase manpower productivity

By partnering with us, our clients are able to reduce costs and leverage gains for longer-term profitable growth.

View Cost Reduction success story of largest manufacturer of plastic bottles in Kenya>