Effective cost management is one of the most critical issues for sustainable growth. For example, at Ford Otosan, which employs 10,000 people, the employees are responsible for cost management. It is not just Ford Otosan. Many companies which want to implement savings in tens of cost items, such as raw materials, personnel, energy and marketing, and are targeting sustainable growth are implementing significant programs in order to achieve this goal. Capital researched the largest cost items at companies ranging from Petkim to Axa Sigorta, Kale Kilit, Eti, Doğtaş and JTI. The result was a demonstration of how companies struggle with the items that account for the lion's share of their costs. Whatever the period, costs have always been at the top of companies’ agendas. The difference between today and the past lies in the approach to costs. Today, companies find and implement more innovative solutions rather than just trying to reduce the cost items. What is important here is the focus on the items that account for the lion’s share of costs...
Click image to see the table. For example, at Ford Otosan, which employs 10,000 people, the employees are responsible for cost management. Ford Otosan General Manager Haydar Yenigün says that the projects developed by the product development and purchasing departments to reduce the costs of materials, which account for a large proportion of the company’s costs, have yielded very important results. It is estimated that in 2013 alone the cost-cutting measures will result in a saving of TL 200 million for the company.
RAW MATERIALS ACCOUNT FOR THE LION'S SHARE
Raw materials costs account for a large proportion of the costs of many industrial companies. It is extremely difficult for companies in the iron and steel and chemicals industry to reduce their raw materials costs because it is the global markets which set commodity prices. But companies still use creative methods to find formulas to secure savings in these areas. One of these companies is Kale Kilit. Kale Endüstri Holding Deputy Board Chair Kenan Kiziltan says that materials and raw materials today account for 60 per cent of total costs. Kiziltan notes that the improvement measures that they have implemented have meant that costs have declined by four points compared with ten years ago.
Many companies think that the most intelligent way to keep costs under control begins before purchasing. And they are intensifying the measures they are taking in this direction. One of these companies is Eti, where raw materials and packaging account for 50 per cent of total costs. Eti Companies Group CEO Hakan Polatoğlu says that this rate was 52 per cent in 2007. Polatoğlu adds: “Our suppliers have their own purchasing processes and stocking and distribution processes.