Monday, June 12, 2017

Historical Analysis of Cost Reduction - An IE Research Avenue

Industrial engineering has three important components: Productivity science, Productivity engineering and Productivity Management (Taylor - Narayana Rao Principles of Industrial Engineering).

Productivity science is developed through research. Historical analysis of cost reduction is one avenue of doing research to unearth the causes of cost reduction. The history of unit costs of various products can be developed over various periods and various possible causes for either cost reduction or cost increase can be hypothesized. Based on data analysis, important causes can be isolated. The effect of these causes on the cost can be quantified. Such cause and effect relations can be used engineering and management solutions to achieve further cost reductions. The cause and effect relations found in one industry may have application in other industries also. This hypothesis can be tested using data of other industries and if found valid can be used in other products or industries to achieve cost reduction.

The historical analysis of cost reduction of various products can also bring out the role industrial engineering theories, methods and tools and that of professionals in reducing costs and increasing productivity in various industries. The contribution of industrial engineering can be quantified at various levels of economy and in various periods through such research output.

12 June 2013

Analysis of historical cost reductions in Brazilian ethanol production

Historical analysis of electricity costs
We have published a report comparing retail prices to the average costs actually incurred to supply electricity to consumers.

Cost Reduction Analysis: Tools and Strategies

Steven M. Bragg
John Wiley & Sons, 13-Apr-2010 - Business & Economics - 336 pages

Discover the tools for knowing the costs your company should cut, without impacting its ability to deliver goods and services
New from Steve Bragg, this book provides the tools for determining which costs a company should cut, without impacting its ability to deliver goods and services. It explains how to use throughput analysis in order to locate bottleneck operations in a company, which in turn dictates where capital investments should (and should not) be made.

Delves into process analysis, to determine where excess resources are being used in a business process
Describes the total cost of ownership, showing how a single purchasing decision actually snowballs into a variety of ancillary costs
Shows how to create and use a spend management system to reduce procurement costs
Shows how just-in-time systems can be used to eliminate inventory costs
Cost Reduction Analysis: Tools and Strategies provides examples to show how much cost can potentially be eliminated to avoid drastic action later that can imperil your corporation's direction and future.

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