Presentation developed and made at a workshop for Senior Executives. ACE Consultants were the logistics partners for the workshop.

1. Workshop conducted by:
Masoud Ali Khan, FCMA
December 14, 2010
Organize by:
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2. 7:31 O Children of Adam! wear your beautiful apparel at ever
(Surah Al A’raf – The Heights).
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3. Norms
Participation
Adding ideas
Listening
No personal attacks
Timeliness - “be here now!”
Fun
Cell phones off or on silent mode
“Thank you for not smoking”

4. Participants’ Introduction &
Expectations
Please share with us your:
Name
Organization
Functional tile

5. Hadith-e-Rasool SAW
Hazrat Abu Hurayrah RAA narrated that the
Prophet SAW said:
“If a people arise from the place where they were
sitting without remembering Allah, then they
have arisen from there like a dead ass. On the
day of resurrection, this meeting will be cause of
regret for them.” (Abu Daúd).
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6. Today’s Coverage
Session I (9 am to 11 am)
Economic Conditions
Business Goals
Concept & Types of Costs
Tea / Networking (11 am to 11.30 am)
Session II (11.30 am to 1 pm)
OPEX & CAPEX
Inventory Management
Budgeting & Standard Costs
Zohar Prayers & Lunch (1 pm to 2 pm)
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7. Today’s Coverage
Session III (2 pm to 3.30 pm)
 Re-engineering of Processes (BPR)
 Continuous Process Improvement (CPI)
 Quality Management (QM)
 Productivity Campaigns / Cost Consciousness
Tea / Networking (3.30 pm to 3.45 pm)
Session IV (3.45 pm to 5 pm)
 Effective Time Management
 Performance Reward Systems
 Effective Feedback Mechanism
 Action Plan
Conclusion & Asar Prayers (5 pm)
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8. Economic Conditions
Economic conditions specially the Macro-economic
factors impact Business.
The recent Global Economic Crisis lead
to the financial crunch.
Loss of Revenues & reduced Consumer buying powers
due to increased Unemployment .
Survival of Business – a great Challenge.
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9. Business Goals
Optimum Profitability – Primary Goal.
Best possible Market Share.
Sound Financial Position.
Reputation & Image.
Satisfied / Loyal Customers.
Satisfied & Motivated Human Resources.
Contribution to the Government.
Contribution to the Society.
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10. Drivers of Profitability
Revenue / Income.
Price
Volume
Costs / Expenses
Variable
Fixed
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11. Concept of Costs
The term ‘cost’ means the amount of expenses
[actual or notional] incurred on or attributable to
specified thing or activity.
Total cost (TC) is how much money is required to
operate at some particular output level. Total cost
equals fixed cost plus variable costs (TC = FC +
VC).
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12. Types of Costs
Fixed Costs VS Variable Costs
Direct VS Indirect Costs
Marginal Cost / Incremental Cost
Prime Costs
Conversion Costs
Overheads
Opportunity Cost
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13. Tea / Networking Break
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15. OPEX & CAPEX
An operating expense / expenditure,
operational expense / expenditure or OPEX is
an ongoing cost for running a product,
business, or system.
A capital expenditure (CAPEX), is the cost of
developing or providing non-consumable
parts for the product or system.
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16. Inventory Management
Inventory management is primarily about specifying
the size and placement of stocked goods.
Inventory is one of the key items of the Working
Capital in the Manufacturing / Trading sector .
Proper Inventory management ensures control over:
Financial Costs
Cost of Obsolescence
Holding / Carrying costs
Opportunity Cost
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17. Budgeting
A Budget is a list of all planned expenses and
revenues. It is a plan for saving and spending.
Cost / Expenses Budgets help controlling these by
monitoring the Actual VS Budget on regular basis.
Budgets help create a Responsible Culture.
Zero-Based Budgets play a key role in
rationalizing and controlling Expenses and
improving the Bottom-line.
Realistic Assumptions are extremely important.
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18. Standard Costs
It is a system of cost accounting which is
designed to find out how much should be the cost
of a product under the existing conditions.
The actual cost can be ascertained only when
production is undertaken.
The predetermined / Standard cost is compared
to the actual cost and a variance between the two
enables the management to take necessary
corrective measures.
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19. Zohar Prayers / Lunch
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20. Re-engineering of Processes – BPR
Processes involve Costs – HR, Systems & Space..
Some of the Processes are historical / prevalent as
legacies in organizations.
At times, management introduces relatively more
Processes to ensure higher amount of Controls.
Business Process Re-engineering (BPR) is a
Rethinking exercise aimed at dramatically
improving the Customer Servicing, Work
Efficiency & rationalizing Operational Costs.
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21. Re-engineering of Processes – BPR
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22. Continuous Process Improvement – CPI
CPI means making things better; it is NOT
fighting fires.
Process Definition lists what happens between
the start and end points. It includes all the
activities performed by each department, group,
or person who are involved in the process.
CPI is a regular review of the activities involved in
a Process for rationalizing them with an Aim of
improving efficiency with adequate Controls and
minimum possible Costs.
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23. Quality Management – QM
All management activities and functions involved
in determination of quality policy and its
implementation through means such as quality
planning and quality assurance (including quality
control).
Quality in working methods and operations both
in producing goods and providing services brings
twofold benefits – Customer Satisfaction / Loyalty
and Cost rationalization by eliminating waste and
reducing errors / rectification of errors.
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24. Quality Management – QM
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25. Productivity Campaigns
Productivity is generally measured by the ratio of
output to input.
Running Productivity Campaigns esp., in
Manufacturing concerns can lead to significant cost
savings e.g., reduction in Labor cost per unit
through effective use of time / methods can result in
massive Cost savings.
Improved turnaround time in Service organizations
can result in similar Cost Savings and improved
Revenues.
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26. Cost Consciousness
Promoting a Cost Conscious Culture across the
Organization by propagating the topics of cost
understanding, cost containment, cost avoidance
and cost reduction.
Switching off Lights / Air Conditioners, while
leaving the workplace.
The 3R Concept – Reduce, Reuse & Recycle.
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27. Tea / Networking Break
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28. Effective Time Management
Time management refers to a range of skills,
tools, and techniques used to manage time when
accomplishing specific tasks, projects and goals.
Prioritizing, Scheduling & Goal setting helps in
Effective Time Management.
Time is Value; its optimum utilization ensures
improved Operating results.
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30. Performance Reward System
Link Activities to Vision, KPIs & KPRs.
Provide reasonable Weight to Organizational
Goals of Cost Control and rationalization.
When Team Members see Performance Based
Rewards, they strive for achieving Goals / Targets.
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31. Performance Reward System
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32. Effective Feedback Mechanism
An Effective Reporting System provides timely
information on Team / Individual performance
and achievement of Goals.
MIS reports help making timely Decisions.
Information must meet the criteria of:
Being Relevant
Timely &
Accurate.
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33. Action Plan
Identify Costs in your respective Areas / Functions.
See which of these Costs are Controllable without
adversely affecting Quality / Performance / Productivity.
Introduce:
 Budgeting & Variance Analysis
 Process Reviews / Improvements
 Quality Initiatives
 Effective MIS / Reporting
Value Time – Utilize it Effectively.
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34. masoudkhan@yahoo.com
www.consultace.com
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35. Asar Prayers
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