Cost Crushers
What is a common packaging optimization that reduces both material cost and freight cost?
Reducing pack size or switching to lighter materials
What is working capital made up of?
Inventory, accounts receivable, and accounts payable
What does “P&L” stand for?
Profit & Loss
What’s the goal of standard operating procedures (SOPs)?
Ensure consistency and reduce errors
What’s one way to measure operational efficiency?
Output per labor hour
Name a tool or method used to identify waste in a manufacturing process.
Value Stream Mapping or 5S Audit
Name one way to free up cash through inventory.
Reduce safety stock or improve inventory turnover
What line on the P&L is affected by product cost savings?
Cost of Goods Sold
What’s the Lean principle for continuous improvement called?
Kaizen
What’s the benefit of reducing touches in a workflow?
Saves time, reduces risk of error
What’s the difference between direct and indirect costs?
Direct costs are tied to production; indirect are overhead costs like rent or admin
What does "cash conversion cycle" measure?
The time it takes to turn investments into cash flow
What happens to gross profit when COGS decreases and sales stay flat?
Gross profit increases
What is the benefit of a cross-functional process map?
Identifies inefficiencies across teams
What is takt time?
The rate at which a product must be completed to meet customer demand
What does SKU rationalization aim to reduce?
Inventory complexity and cost
How can you improve cash flow without changing revenue?
Delay payments, speed up receivables, reduce stock
Name one way that improved efficiency impacts the P&L.
Reduces operating expenses
What does RPA stand for, and what’s it used for?
Robotic Process Automation – used to automate repetitive tasks
Give an example of “doing more with less” in supply chain.
Fewer trucks with fuller loads
Name a cost-saving benefit of sourcing raw materials locally.
Lower transportation costs, shorter lead times, fewer tariffs
Why is reducing inventory aging important for cash?
Older inventory ties up cash and risks write-offs
What’s the formula for operating profit?
Gross profit – operating expenses
What’s a common cause of rework in production?
Poor documentation or inconsistent inputs
What’s the difference between efficiency and productivity?
Efficiency = doing things right; Productivity = doing more in less time