On average, each $1 in cost reduction equals $5 in new revenue. In an economic environment where sales are flat and clients resist price increases, cost reduction is the primary way to improve the bottom line and increase the value for shareholders.
The major barrier to continuous cost reduction is not the suppliers; instead, the internal resistance to change by employees is often the primary reason companies can lose out on millions of dollars. Alliance Cost Containment outlines the seven primary reasons employees resist cost reduction efforts and illustrates possible solutions to overcoming this resistance.
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