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Cost Reduction Leads to Growth

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Cost Reduction Leads to Growth

Published by maxaudience on March 21, 2017
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  • Desuperheaters
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As manufacturers and other industry leaders look back over the last half-decade, the impact of the recession on business has been marked.  As companies struggled to continue to find profits, industry leaders were forced to look closely at budgets, layoffs, and what is now known as “lean” business practices, which essentially means doing as much as you can with fewer resources.  Cost optimization was key to staying afloat.  But now, looking toward the next few years, businesses are in a position to see how cost reduction will enable future growth.

This may seem counterintuitive at first.  After all, labor costs are relatively stagnant, if not getting slightly more expensive and emerging markets are beginning to finally show signs of slowing down.  But for companies looking to tie cost structures directly to their capabilities systems, then growth will come from understanding how costs are directly impacted.  This doesn’t just mean the typical cost cutting measures businesses use to tighten their belts.  Looking at cost efficiency enables businesses to grow much more effectively.

For example, making the investment in a desuperheater with innovative processes means less energy wasted on the heating process, less thermal cycling fatigue, less space and ultimately less pipe down the line, as well as less down time and wear and tear.  Energy savings, degredation of equipment, fewer materials and less down time are all cost savings that are accounted for in other ways – but rarely do companies have the foresight to think of how their equipment can improve their opportunities for growth in all of those ways. This type of cost cutting may not be as obvious at first; it isn’t like trimming the marketing budget while still facing your competition.  But realigning industrial costs can free up a significant amount of investments to grow other projects.  Companies who deploy resources more efficiently do better in the long run.  Consider whether the organization needs to make a short-term investment in better equipment in order to benefit the bottom line over time.

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