What Exactly Should Enterprises Manage in Order to Reduce Costs and Increase Efficiency?

Original

In 2025, reducing costs and increasing efficiency remains a crucial issue for the survival and development of enterprises. I believe that many corporate managers are troubled by this: I have already cut all the costs that can be cut, but the enterprise's performance still doesn't improve. What on earth should I do? Regarding how enterprises can reduce costs and increase efficiency, I have six suggestions, hoping to provide some practical ideas and methods for everyone.

I. The Key Entry Point: Optimize the Process

Process optimization is a key entry point for reducing costs and increasing efficiency. It runs through all aspects of enterprise operations, from product research and development, production and manufacturing to marketing and after-sales service, and plays a decisive role in the cost control and efficiency improvement of enterprises. During the long-term development of traditional enterprises, a set of complex and cumbersome process systems often takes shape. These processes may have played a positive role in a specific historical period, but with the changes in the market environment, technological innovation, and the expansion of business scale, some processes gradually become redundant and inefficient, becoming obstacles to the development of enterprises. For example, in some large enterprises, the new product research and development process involves layers of approvals from multiple departments. It takes several months from the proposal of an idea to the product's project approval, resulting in the enterprise missing out on market opportunities.

As a manager, you must draw on advanced process optimization concepts and methods, such as Toyota's lean production model. The core of this model lies in eliminating waste and continuous improvement. Through methods like "Kanban management," precise control of the production process is achieved, significantly reducing inventory backlogs and production cycles. In this context, you might consider adopting ZenTao project management software. ZenTao offers mature and comprehensive support for Kanban, Waterfall, and Agile methodologies, making it one of the most robust project management tools available today. Its features include customizable workflows, sprint planning, bug tracking, and real-time progress visualization, all designed to enhance team collaboration and efficiency.

For the internal processes of enterprises, optimization can be carried out from the following aspects: comprehensively sort out the existing processes, draw detailed flowcharts to clearly present the transfer relationships and responsible subjects of each link. Encourage employees to actively report the problems existing in the processes, because front-line employees have the deepest understanding of the pain points in actual operations. According to business objectives and customer needs, redesign the processes, remove unnecessary approval links, simplify operation steps, and achieve the flattening and high efficiency of the processes.

II. The Only Way: Digital Transformation

Currently, digital transformation has become the only way for enterprises to reduce costs and increase efficiency. Digital technologies can be deeply integrated into all levels of enterprise operations, reshape business models, and innovate management methods, thereby enhancing the competitiveness of enterprises. Many enterprises have many misunderstandings during the process of digital transformation. Some enterprises blindly follow the trend. Without fully evaluating their own business needs and technical capabilities, they invest a large amount of capital in purchasing digital systems. As a result, the system and the business are "two separate entities", which not only fails to play the expected role but also causes a waste of resources.

Let me share an example with you. A customer in the retail industry once introduced an inventory management system. However, due to the lack of in-depth analysis of the characteristics of his own supply chain, the system was unable to accurately predict inventory needs. Instead, it led to inventory backlogs or stockouts.

Enterprises should formulate a clear digital plan according to their own business strategies. In terms of production: Utilize industrial Internet technology to achieve the interconnection and remote monitoring of production equipment, collect production data in real-time, optimize production processes through data analysis, predict equipment failures, and reduce equipment maintenance costs and downtime. In terms of marketing: With the help of big data analysis, accurately gain insights into customer needs and market trends, achieve precision marketing, and improve the input-output ratio of marketing. At the same time, attention should be paid to data governance to ensure the accuracy, integrity, and security of data, break down the data barriers between departments, achieve data sharing and circulation, and provide effective support for enterprise decision-making.

III. The Basic Element: Resource Management

Resources are the basic elements of enterprise operations. Effective resource management enables enterprises to maximize their benefits under limited resource conditions. In terms of resource allocation, enterprises often face the problem of resource misallocation. During the process of business expansion, some enterprises blindly disperse resources and step into multiple unrelated fields, resulting in insufficient investment in resources for core businesses and a decline in competitiveness. Enterprises should strengthen their awareness of strategic focus and concentrate limited resources on core businesses and key projects.

Through a comprehensive evaluation of the business, clarify the core business segments and allocate sufficient human, material, and financial resources to them. At the same time, optimize supply chain management, establish long-term and stable cooperative relationships with high-quality suppliers, reduce procurement costs through centralized procurement, joint research and development, etc., and ensure the stable quality of raw materials. In addition, for idle or inefficient assets, such as equipment with low utilization rates and goods with inventory backlogs, they should be promptly cleared or revitalized to improve resource utilization efficiency.

IV. The Key Link: Improving Talent Efficiency

Talent is the most important asset of an enterprise, and improving talent efficiency is a key link in achieving cost reduction and efficiency improvement. In the process of cost reduction, some enterprises simply adopt measures such as salary cuts and layoffs. Although these measures reduce labor costs in the short term, they seriously dampen employees' enthusiasm and creativity, leading to a decline in labor efficiency and having a negative impact on the long-term development of the enterprise.

Enterprises should establish the concept that "talent is an asset" and stimulate employees' potential through a scientific performance management system. Design a reasonable performance indicator system that closely integrates individual goals with the enterprise's strategy to ensure that employees' work direction is consistent with the enterprise's development goals. Pay attention to the management of the performance process, strengthen guidance and support for employees, help employees improve their work capabilities, and achieve performance goals.

V. The Fundamental Guarantee: Focusing on the Growth Strategy

Cost reduction and efficiency improvement are important means for enterprises to deal with short-term challenges. However, in the long run, growth is the core driving force for the sustainable development of enterprises. In the process of cost reduction and efficiency improvement, some enterprises focus too much on cost control and ignore the exploration of business growth opportunities, resulting in the enterprise falling into a "cost reduction trap". Although costs are reduced, the market share is also shrinking continuously, ultimately affecting the survival and development of the enterprise.

Enterprises should always take growth as their primary goal and actively seek new business growth points. This requires enterprise managers to have keen market insight, pay attention to industry trends and technological development trends, and capture market opportunities in a timely manner. On the one hand, drive growth through innovation, increase investment in research and development, launch new products and services that meet market needs, and enhance the added value of products and market competitiveness. On the other hand, expand market channels, expand the customer base, and increase market share through market segmentation, regional expansion, and other means.

VI. An Important Means: Establishing an Ecological System

Cost reduction and efficiency improvement are not isolated tasks of a certain department or a certain link in an enterprise, but require close collaboration among all departments and links of the enterprise to form an organic ecological system. In actual operations, departmental barriers often hinder the promotion of cost reduction and efficiency improvement work. In order to pursue technological advancement, the R&D department may ignore cost factors; in order to ensure the production schedule, the production department may not strictly control the quality, resulting in an increase in after-sales costs; in order to complete sales performance, the sales department may over-commit to customers, bringing additional cost burdens to the enterprise.

Managers should break down departmental barriers and establish cross-departmental collaboration mechanisms. During the project promotion process, form a project team composed of multiple departments such as R&D, production, sales, and finance, and jointly participate in project planning, execution, and monitoring. Through regular cross-departmental meetings, the establishment of information sharing platforms, and other means, strengthen communication and collaboration among departments to ensure that all departments reach a consensus on the goal of cost reduction and efficiency improvement and support and cooperate with each other in their work.

For corporate managers, cost reduction and efficiency improvement are a systematic and long-term project. You need to maintain keen insight and decisive decision-making ability, continuously adjust strategies, adapt to market changes, lead the enterprise to move forward steadily on the path of cost reduction and efficiency improvement, and create a more brilliant future.