COST CONTAINMENT

Cost containment, along with quality is the greatest challenge facing North American companies today -- not as a crisis management tool, but as a strategic, on-going part of corporate activity. Now, rejecting the traditional "cost-accounting" mind-set, Peter Richardson shows for the first time how cost containment can actually create a wealth of new business opportunities. This approach has been used by the Japanese as a major part of their success. Using examples drawn from actual industrial experience, Richardson reveals:

* How corporations that manage costs effectively are lean and keen, rather than lean and mean
* How to implement and build commitment to an effective corporate-wide cost containment strategy
* How employees at Herman Miller, a major furniture manufacturer, led the way in cutting $12 million in costs -- and earned themselves $4.9 million in bonuses
* That tough, no-nonsense cost reduction activities have to be the start of a longer term strategy to ensure continued cost competitiveness
* How one of North America's major mining corporations uses cost management as the key competitive weapon in a growth strategy that tripled its market value during a five-year period of depressed prices
* What strategies can turn capital intensive activities (i.e., building the factory of the future) into successes and not cash traps like G.M.'s Saturn Division
* How executives provide leadership in corporations that have cost containment as a key element of their overall strategy

Richardson demonstrates that traditional "lean and mean" approaches such as one-time cost purges and massive layoffs may provide quick-fix solutions, but fail to drive down long-run costs. He documents how "nickel and dime" measures, such as rationing office supplies, cutting travel costs, and skimping on market development end up increasing overall expenses while fostering dangerous demoralization among employees. Most importantly, he shows what does work: on-going strategies that make a business "lean and keen" -- a low cost competitor in today's tough world markets.

A "lean and keen" approach stresses the need for top-down directed cost-reduction and the building of a shared employee culture in which cost reduction is viewed as an important, challenging, and rewarding activity. Richardson investigates the nontraditional areas of cost-cutting, the real meaning of no-frills management, and the importance of involving employees in a company-wide program that includes purchasing, marketing, distribution, overhead, improved employee safety and decreasing absenteeism, debt reduction, divestiture, and technological innovations.

Richardson outlines a four month start-up plan and step-by-step actions for implementing a comprehensive cost reduction strategy that is applicable to a wide variety of service and manufacturing industries. Immediate savings are shown to be an important element contributing to success. He also describes successful cost-management activities in dozens of corporations, including American Express, Sikorski Aircraft, Herman Miller, Inc., and Britain's Marks and Spencer. The result is a work that gives today's manager a true "secret" weapon for survival and steadily increasing profits even in today's sluggish economy.