The end point of blindly cutting costs is the abys

The end point of blind cost reduction is the abyss

many people believe that cost reduction is the only way for enterprises to survive in a difficult or depressed economic environment. This is understandable, but it is indeed a misunderstanding of cost

cost and expenditure are two different concepts. The so-called cost is the part of the cost that you want to get some return. This is why there is a main business cost item in your income statement. The design of assistive equipment matches the host. All the products you produce should be sold. Expenditure refers to other expenses, which explains why the wages of workers are regarded as the costs of the enterprise, while the wages of sales and administrative personnel are regarded as the expenses of the enterprise

costs are generated by investment decisions made by business owners. The printing machines and other equipment in the factory are purchased by enterprises according to the specific needs of a specific printing customer for printing materials at a specific time. Since the equipment purchased by enterprises can be used for many years, their original purchase price may not keep pace with the values of today's and future markets

it can be seen that if an enterprise wants to change the cost, it must change the attribute of its core investment. It is impossible to solve the problem only by playing a marginal role

as many managers have said, cutting costs will not change the nature of their business operations

some people also believe that a strong economic environment will change their enterprises. In fact, this cannot and will not happen. If the printing demand changes fundamentally, it means that the equipment installed in the printing plant (as well as relevant knowledge and operation methods) can no longer adapt to the pace of market development

in addition, there are some differences that deserve our attention. In the past, the costs of printing materials and labor were basically transferred to printing buyers, but today, many multimedia and communication means are competing with printing for the market, and their prices are far lower than printing. An ordinary station can play the same role as a brochure, and once they are started, the owner of the station will no longer have to spend time communicating with readers. In other words, no one will put the station in an envelope and send it to readers. They can see everything they are interested in on their computers

in recent years, the growth rate of printing prices has not kept pace with inflation. In other words, the average sales price of commercial printing materials increased by less than 3%, while the price of consumer goods increased by 6%, and the overall producer price index also increased by about 9%. As I mentioned earlier, printing prices are falling every day, because its price has never kept pace with inflation, but the cost of other media has fallen faster than printing

to reduce costs, we must produce the most popular products with the highest efficiency

while digital communication has become a general trend, the new generation of commercial communication users have realized that printed communication will cause serious damage to the earth's resources. Although it cannot be completely avoided, they can find ways to reduce the use of printing materials

according to the current technology trends and the behavior habits of young consumers, anyone who wants to retreat in a bad economic environment is actually fooling himself or herself. Cutting costs will not solve all problems. In fact, this method often brings greater difficulties to enterprise management. This advanced technology originated in the United States and has been successfully used in North America and other regions for several decades. In an enterprise, everything is interrelated. If you cut one link, it means that another function may be affected, which also increases the cost of printing enterprises

only change 8 Report: experimental data and marked forms can be automatically reported and printed. Only by printing the source of cost can we achieve real cost savings, which requires us to rethink the development goals of enterprises and the purpose of equipment and other investments

depreciation method is a structural factor that makes many printing plants adhere to the use of over aged equipment, and it is also a very important concept. Nowadays, the marketing life of equipment can no longer be compared with that of the past, and it will be further shortened. If possible, leasing equipment may be an effective way to reduce long-term costs and reduce enterprise risks

I once read an impressive sentence in the blog of an industry expert about the adoption of the unit rotary design principle. He said: cost cutting is a downward slope, and its end point is an abyss. When you decide to change your financial budget, please think carefully about what this expert said. If the higher cost allows you to produce products that meet the market demand, then the price is worth paying

printing buyers will not pay for your costs, they just regard printing as a media. The cost you face today has been determined as early as a few years ago, which also reflects the importance of strategic planning from another aspect. Can your original strategic plan still play a role today or even in the future