Most of the managers as profit enterprises basic objectives. But for many departments to increase profits method is very limited, is none other than to increase sales, raise prices change fixed costs and changes in costs, changes in product mix and types of services portfolio, or reduce costs. For today's ever-changing field of the competition, by reducing costs and raising profits channels is the most practical and feasible. A short-term cost reduction effective from the traditional point of view, the attention of many managers to reduce costs. They only under pressure from their superiors before they do something to reduce the cost of work. The following examples illustrate the many managers that the cost issue. In a company of a branch, the senior management staff Monday morning routine business will be reported on. In general, departments in charge of the first departments in this simple activity report then branch manager of the Company conveyed the new instructions, usually wearing gray between right and quips Corporation instructions matters in the community. But this time the business atmosphere is somewhat different. According to the branch manager of the second quarter of operating statements, briefly tell you that the last three months have been rising in cost, and the profit decline. He also told the gathering, Corporation of mounting pressure, urged him to keep costs down. He now intend to follow advice of the Company until the situation was improved. Participate in the meetings of the heads of departments to change the normal order that they have spent a few hours and developed a lower-cost integrated plan. The main points are as follows : to reduce the front line workers. From the first-line employees eliminate redundant those people. Reducing overtime. Contract has not been clearly defined wage increases will be delayed for. Cutting equipment preventive maintenance budget. Stop some "non-essential" social activities (the majority of relationships with the arrangements). Raise production targets. Reducing inventory. A temporary reduction of quality standards. Find some lower cost alternatives. In the implementation of the plan in 2-3 months, the branch manager and his subordinate in charge of the relevant department, see profits have been back-up, and sighed with relief, their efforts are clearly works. But through many aspects of the study indicated that where the lower-cost plans, which are only effective in a short time. Few long-term success. Retired secret Xi'an University director of the Institute of liket (Rensis Liket) had a pair of Health The factory production line were studied. The factory has 600 workers, adopted a mandatory program to reduce costs. It is estimated that the program, the company will be able to save 250,000 U.S. dollars. However, the management of various efficiency measures, such as institutional reform, personnel and the organizational structure of the budget, change the work flow, strengthen management, as workers for a boycott, with the result that the drop in productivity, output, timely delivery, quality, and decreased customer to increase the conflict and the emergence of the phenomenon stop, Finally enterprises in the competition lost a lot of business. As a result of coercive methods emergence of so many side effects, not only can save annually 250,000 U.S. dollars. Instead increase of 20 million dollars in costs. Below is a dedicated wire factory's cost reduction program, which may have long-term effectiveness? Faced with the rising costs and profits continue to decline The plant upper management, the implementation of the above listed some cost-cutting measures One of the measures is to reduce the company's equipment maintenance budget, including the reduction of maintenance personnel, Let machine operators are responsible for maintaining their own use of the equipment. The company's cable machine obsolete and need regular maintenance can seriously normal operation. Use this method to reduce cost, what would be the result? Readers may think that this is a short-term emergency, However, the fact machinery operators are reluctant to assume this additional to the maintenance tasks, not seriously repair of machinery, the machinery will soon begin to increase down time. Even worse is that some of the machines are inferior goods. As the reject rate rose quickly, go to the rising costs, declining quality, and it has been unable to deliver, and ultimately enable enterprises to be losing its competitive edge. Here such a short period of the country's lower-cost methodology is not limited to the manufacturing sector, other sectors also. In a removal of household equipment of the company, responsible for the loss of compensation customers working efficiency is very low, and high costs. To solve this problem, the upper management, the appointment of a manager to reduce costs and improve the functions of the departments work. As the manager does not handle interpersonal relationships, he quickly reorganized the department, the increase in the standards, reduction of the number of personnel, and some people stopped work. Three months later, the department workers jointly wrote a petition, demanding the dismissal of the manager, and threatened that if upper management workers rejected the request, they will resign. Upper management only concession to mobilize the manager's job, but the cost has yet to be resolved. Reduce the long-term cost and effective way to reduce the short-term cost effective way to the distinction between what is not used in concrete action and what methods are different, but in the lower right attitude and commitment to a different responsibility. Many mentioned above in order to reduce costs and to take action in certain circumstances it is acceptable, or necessary. For example : If sales drop in output to be the case, temporary reduction of the production line workers is probably the only viable option. If it is found that too much overtime, of course, it should be reduced to the necessary standard. If the production targets is too lax, then it should improve some. Management must not be saved because some of the costs to be complacent. The problem is that the management departments often rely on some isolated measures to keep costs down, Once costs exceed certain limits began to regard it as a topic to deal with. When the balance of payments table shows that the problem has been fully resolved, put it ignored. 2, the long-term cost reduction is not an effective way all the units are erroneously used to reduce short-term costs of emergency, on the contrary, many units have some long-term proven scientific management methods to solve the problem of cost. Effective long-term cost-cutting methods include : cost accounting, profit and loss analysis, methodology, flow charts, value analysis, Statistical analysis and engineering and automation, and other highly technical approach. Although these methods is effective, but have not been widely used, especially in small and medium-sized enterprises. 3, and cost reduction team building group activities to reduce costs is another way to reduce costs. This approach through the establishment of semi-autonomous groups of lower costs, through collaborative management system and well-planned incentives, by using traditional methods and creative ways to group members for training to the cost of the identification, analyze and resolve. Many enterprises have adopted this approach. Lower cost group is a long-term cost effective solution to the most effective method. Reduce costs teams have rigorous scientific methods clearing and those created by the innovative combination of technology, It encourages workers worried about costs, and information exchange. Therefore, the lower the cost of group who can take full advantage of proven methods to reduce costs, organizations can fully consider the human factor. Below is a lower cost of how the work of the specific examples : History nicardipine meter company is a household appliances factory production control electrical and mechanical and electrical products. The company is located in New York, northern region, which is located in Toronto, Canada in North America, a subsidiary of Limited controller. History nicardipine meter company employees 900 people, of whom 755 are time workers. 125 people have duty-free or tax-free fixed wage. In 1978, the company's history of nicardipine sales amounted to 210 million U.S. dollars pre-tax profits of 4.9% Enterprise growth rate of approximately 10%. As the history of nicardipine low efficiency, high operating costs, production manager ho in the decision to enact an effective cost reduction program. Hao in the past served as the North American controller in Toronto, a business manager of the manufacturing sector. in September 1978 the company transferred to the history of nicardipine. He controller companies in North America have successfully participate in union plan Therefore, I hope the history of nicardipine companies have also established a similar program, he hired a number of management experts as his assistant. Hao in and his senior aides, held a preparatory meeting, the consultants recommended that an analysis of the situation, to ensure success of the program to collect the information necessary, and to determine the cost of creating lower in the history of nicardipine whether practicable. Then set up a committee of senior program consultant with the work, after the Commission on cost reduction into the steering group. The committee-together with the consultant, who decided to collect the necessary information, the use of which method to collect the information. Upper management is particularly concerned about workers and the management of the relationship between harmony, adequate to ensure that workers participate in the plan's success. The required information is subject to several types of collection methods : individual observation, individual talks, past records and statistical analysis quality control, management accounts and audit. Through analysis, identify the major cost reduction goals, estimate the plan with the participation of employees of enterprises in the organization and management of the state. The results confirmed that the upper management's assessment that with a fixed salary workers positive attitude in favor of change, But ordinary workers whether to support it is doubtful, the main issue is the management and staff of the department, the mistrust. So, 1492 he and his senior aides decided to proceed with implementation of the plan, at least initially, It is necessary to lower the cost of participating in group are limited to management, supervision and other departments have fixed salaries within the staff. Consultants and project committee members will work together to amend the trial by the lower cost of the master plan, nicardipine bring it into line with the history of the specific situation. Plan proposed the establishment of the steering group to reduce costs (by the project committee members), establish two pilot group to reduce costs, cut costs to appoint a coordinating group (only a part-time one year), establish an advisory group to reduce costs (from the financial sector, product development departments, Data processing and marketing sector representatives). They are the future of lowering the cost of group members and 10 to determine the future of a team leader. They then determined that the 1979 fiscal year goal of lowering the cost of 60 million dollars also formulated detailed incentive plans and communication. Lower costs of all the teams in level appointments, History nicardipine started a company on how to use continuously creative ways to cut costs and concentrate on the training. In the initial period of training, 30 employees took part, including all relevant agencies and the future head. They are compiled into two classes, each class 15, a 24-hour classroom teaching. During the training period, has been approved by the program had been further added, clear to the company by the end of 1979 saving material handling cost 100,000 U.S. dollars. Test team also began, a group focused on the parts issue, Another group focused on quality issues. As the 90-day trial period at any time of evaluation findings, it was decided that during the trial period, Each group had at least weekly one-hour seminar. At the end of the trial period, the results were evaluated. Parts Panel program to reduce the estimated cost savings 77,000 U.S. dollars. Quality group that savings may be more than 125,000 U.S. dollars. Two programs submitted to the steering group after approval. After the trial period, is not some unanticipated windfall, but also of great significance. Although the company's cost reduction plan has not yet announced all workers, but trade unions at all levels have begun to express interest in it. Some workers began to voluntarily register for the next group to reduce costs. In addition, the two original pilot group members plan with a high degree of enthusiasm, they said, with the other members of the team work together, each of them have a considerable harvest. In early 1979, nicardipine history of the management of the company, expanding the program to other six target areas, each have specialized teams. In addition, the two original pilot group's work continues, the three panels absorption in the ordinary worker. To the end of 1979, the company not only the history of nicardipine to reduce costs 600,000 dollars objectives of the project. but also reduce over 15 million, lowering the total cost amounted to 750,000 U.S. dollars. The scheme in 1980 to continue and expand further. 4, and who should be responsible to reduce costs because businesses everywhere face of the rising costs of, managers and managers will have to be a high degree of cost consciousness, it is true that some managers and management staff is like that. However, a considerable number of managers and management staff We have not established a high degree of cost consciousness as project management and part of the normal activities. While the evolving situation requires a high degree of cost consciousness, While some managers were also indifferent to the problem of cost, this phenomenon seems to be contradictory, but in reality not. By the following four law cost, helping to understand this phenomenon. Law is the cost of four production manager Caditz (Clement Caditz) proposed. Caditz cost four law are as follows : increasing costs and lowering costs in the efforts is just the reverse of cases. Enterprises with better economic condition, the lower the cost-effectiveness of the work of the economic situation worse than when the benefits as well. Work to reduce costs, the economics of the business situation worse, it will pay greater efforts. As the economic situation good, the effort will be reduced. Enterprises with better economic condition, the company's business activities tend to increase, and to increase the cost of asymmetry. Caditz cost four dictates of the phenomena described widespread, One of the reasons is that many enterprises do not have a clear responsibility to reduce costs. Upper management to reduce costs always call, the call to keep costs to maintain the minimum standards. However, in many cases, upper management and lack of accountability to reduce costs. or failure in reducing the cost of activities as a manager, management personnel and other staff work assessment component. Each employee responsible for lowering costs. Plans to reduce costs in the extent to be successful, Everyone should depend on the reduction of costs as their share of responsibilities. As a manager or managers, the responsibility of the areas under their jurisdiction to create an awareness of environmental costs, to promote each of its workers to establish a high level of cost consciousness. As managers, but should also learn about the practical cost-cutting skills, learn how to identify costs, and the use of the most effective ways to reduce costs solve the problem of cost. Meanwhile, we must also training junior staff to enable them to learn those skills and methods. Yet, in fact, when some employees to conduct the investigation and asked them who should be responsible for the lower costs, They always think other people have the responsibility and not the responsibility of their own. Most workers believe that their superiors or the highest level of management responsible should reduce costs. Even foreman, management or some managers are often considered to reduce the cost should be the responsibility of high-level management. In many data indicated that the contingency cost-cutting methods usually are effective in the short term and very little long-term effect. Effective short-term and long-term cost effective method to reduce the differences. lies not in the specific measures and specific method, but to reduce the cost of work and the attitude assumed a different responsibility. Although there are several strong skills in the long-term to reduce cost effective way But many enterprises whose financial and personnel reasons, but not use these methods. Many units have found that the lower the cost of the work is the most effective method, which can solve the long-term cost. Group activities to reduce costs is a scientific approach and innovative technology combine to create ways The involvement and encouraging employees to participate in cost reduction, and encourages the exchange. Because each enterprise workers are responsible should reduce costs, this one is very important.