By giving thought to everything that happens in an enterprise, managers and other employees can often find a way to cut costs. If the work tempo slows in manufacturing, "this is a big chance to examine revenue-producing processes and systems, and improve them," notes RevenueJournal.com.

Re-Engineer Operations
Re-engineer your operations. To illustrate, if a process involved pumping liquids, for example, the energy requirements associated with pumping can be reduced by using larger diameter piping. Ray Anderson, founder and chairman of carpet manufacturer Interface, Inc., recently told IndustryWeek.com that if a mechanical engineer did this, "93 percent less horsepower" would be needed.

Waste Nothing
Reducing non-value added compliance-related activities during manufacturing can help cut costs. Other savings can be gained through: 1) aggressive waste reduction; 2) monitoring downtime; 3) designing and making products right the first time; 4) improving processes continuously; 5) using key performance indicators; and 6) managing enterprise assets thriftily.

Save Time
Become a time-based manufacturer, suggests ISA.org's Talk to Me blog: Ensure the "communication system works up and down the enterprise." Real-time data gathered and used by manufacturing personnel and information technologists permits enterprises to get smart.

"The opportunities are abundant for reducing costs in manufacturing operations," Matthew Bauer, director of Information Software at Rockwell Automation, told ISA.

Cut Travel
Minimize travel expenses. Travel, especially for global companies, is a huge productivity disruption.

Long ago, teleconferencing was a poor second choice. Those days are long gone: High definition, life-size images on large screens and the ability to teleconference up to dozens of individual screens all enable businesses to save money by avoiding payments to airlines and save again as their employees are actually working rather than sitting in airports or on aircraft. Wachovia Small Business recounts the example of a firm that recovered its entire $160,000 investment in video conferencing equipment in just the first few months of using it.

Major time-savings also result from telecommuting, mainly in premises costs, office overheads and labor. A travel services firm found that each telecommuting travel sales agent costs the company about $1,300 over three years. "Against this expense, the company saves about $4,400 per year in office space rental. At the end of three years, the company has saved $11,900," says Wachovia Small Business.

Join the Buying Club
Ten years ago, textile manufacturers found the justice department "has no current intention to challenge the joint purchasing arrangement that the Textile Energy Association proposed to its members," says the United States Department of Justice. According to sourcing solutions provider Corporate United, Inc.:

Organizations participating in purchasing consortiums reported that purchasing through their consortiums saved them about 13.4 percent, which yielded an average annual savings of about $2.3 million for each member. Comparing this to the average annual cost of $300,000, and using a liberal interpretation, this results in an average return on "investment" of 767 percent!

Are you buying energy through a group or as an individual entity?

Revisit Projects
Taking a tip from information technologists, InfoWorld suggests chief information officers (CIOs) review and "identify which projects could be postponed, cut or canceled." CIOs could also try other tactics, such as renegotiating vendor pacts or enacting hiring freezes, says Forrester. It should be considered, though, that such steps could antagonize business partners and overburden staff, as two analysts noted.

While cutting costs, it's useful to recall that eventually the economy will turn around, so managers may want to think on how the company's positioning will take maximum advantage of increasing demand.

Resources

Recessions Can Be Good for You
by Kristin Zhivago
RevenueJournal.com, Jan. 25, 2008

Green Spot: Interface, Inc. – Zero Sum Game for Good
by Brad Kenney
IndustryWeek.com, Jan. 25, 2008

Operational Excellence Key for Survival
by Greg Hale
ISA.org - Talk to Me, Sept. 18, 2007

Department of Justice Antitrust Division
by Joel I. Klein
U.S. Department of Justice, Sept. 4, 1998

Consortia, Buying Groups and Trends in Demand Aggregation
by Keven Gray
Corporate United, Inc.

Cash for Telecommuting
by Robert Moskovitz
Wachovia Small Business

Reduce Manufacturing Costs Associated with Quality, Compliance, and Manufacturing Efficiency
Entegreat

Analysts Give CIOs Advice on Weathering Recession
by Chris Kanaracus
IDG New Service (via InfoWorld), Jan. 31, 2008