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The principle of management by exception for storage costs

by:CNS     2021-07-17
The principle of warehousing cost management by exception 2021-06-20 08:17:06 Daily cost control is mainly through the analysis and research of various cost differences, so as to find problems, tap the potential to reduce costs, and propose improvements or correct shortcomings specific measure. In order to improve the efficiency of cost control, the management personnel of Guangzhou logistics company should concentrate their energy and time on the key differences ('exceptions') that are abnormal and non-conventional, find out the reasons and promptly report back to the relevant cost responsibilities. center. The criteria for determining 'exceptions' usually have the following four items: 1. Importance Generally speaking, only significant differences in the amount of money can get the attention of managers. The difference here includes surplus and deficit. Because of the surplus of a cost responsibility center in a logistics company, it may also bring adverse effects or produce adverse consequences to another responsibility center. In addition to stipulating a percentage, some companies use a minimum amount to restrict it. 2.- Consistency If a certain difference has never exceeded the prescribed percentage or minimum amount, but the difference lasts for a long time (such as two weeks or one month) to linger near this limit, it should be regarded as an 'exception' 'It needs to arouse the full attention of management personnel. Because this 'exception' may reflect that the original budget or standard is out of date and should be adjusted in time; it may also be caused by lax cost control and must be corrected quickly. 3. Controllability All cost items that cannot be controlled by managers should not be regarded as 'exceptions' even if there are differences in importance. For example, due to changes in public warehouse charging standards, insurance rates, or national tax rates, there are large differences in amounts, and managers do not need to take any follow-up actions. 4. Particularity Any cost item that has an important impact on the long-term profitability of a logistics company, even if the difference does not reach the level of importance, should be closely watched by the management staff, and even any difference should be regarded as an 'exception' , It is necessary to trace the cause and make a remedial decision quickly. For example, if the maintenance costs of fixed installations are one-sided pursuit of savings, it will cause the machine to operate with illness, resulting in a reduction in future work efficiency and a reduction in revenue, etc., these losses are often much larger than the saved maintenance costs, and must be caused. The degree of attention of management staff.
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