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Reducing the Costs of Operations and Processing

ProAnd employ several tools as part of a methodology to reduce the costs of operating 
a meat processing business.

The costs of processing also need to be considered by classifying the area in which 
costs are incurred i.e.

Internal costs - costs which are under the control of the business

External costs - costs that are imposed on the business either as part of the 
supply chain or markets targeted for products or regulatory compliance costs.

Each processing company is different - operations, markets, products, location etc. 

ProAnd has the experience and tools to assist you in all stages of the cost reduction process.

Stage One - Establish the Present Position

Actions Tools and processes (options) Outcomes
Establish present performance of the processing operations 

Establish performance variance from industry averages and best in class industry indicators

Financial performance benchmarking Quantified base performance point to audit and measure outcomes of project

Realistic, achievable targets for the cost reduction project.

Labour audit
Technology audit
External cost review
Supply chain review

Stage Two - Determine the project(s) - Structure the Program

Actions Tools and processes Outcomes
Review outcomes of review process and determine projects that will provide improvements in cost of operation.

Determine the KPI's, costs and deliverables for the projects

Prioritise projects to provide a coherent strategy for cost reduction 

Determine  resource requirements and program

Cost benefit analysis Coherent strategy for reducing the costs of operating the business.

Defined outcomes and agreed deliverables before committing expenditure

Plant operational cost
Return on Investment (ROI)
Internal rate of return (IRR)
Payback period

Stage Three - Project(s)/Program Implementation

Actions Tools and processes Outcomes
Provide information to affected staff and teams.

Allocate resources and appoint responsible persons

Provide necessary authorities

Implement and monitor projects

Staff / team meetings On time / on budget project.

Informed workforce

Input from affected staff/departments

Bulletin boards
Project review meetings

Stage Four - Completion of Cost Reduction Program

Actions Tools and processes Outcomes
Commissioning of Projects

Post projects / program review

Labour Audit Corrective actions

Lessons learnt

Reduced cost of operation
Benchmarking 
Measurement against project/program KPI's
 

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Copyright 2008 ProAnd Associates (Australia) Pty Ltd
Last modified: April, 2008