FINANCE ACCOUNTING COACH | Free Online Accountant Reference Site

This third part relates to some suggestions on KPIs that can be established when a company is conducting a cost awareness or effectiveness exercise.

Some suggestions are:

1.Targeted Cost Reduction

Each department tasked with identified suppliers/costs and % Y-O-Y tasked to reduce
Key Performance (Cost) Indicators (KPI)
Periodic Tracking and Review 

2.Leverage on commonalization of suppliers base

Target 2/3 suppliers for common products [...]

From Part 1, we can better understand the difference between a pure cost reductions/cuttings and cost awareness/effectiveness.

This article attempts to relate how we can perform a cost awareness/effectives exercise:

Some of the following steps might include the following:

Drill in to find out WHERE does the company’s cost come from;
Review critically all major expenses (after item 1);
Review some [...]

In earlier articles on the roles of finance, one of the more routine exercise is to review the company’s cost base with the objective of conducting costs cutting exercise to at least align to the revenue generated.

However, a very interesting question arises before we can do anything on the costs. Are we performing a cost reduction/cutting [...]