Cost Reduction Technique

Work Study
• Analysis of the work methods and the equipment used in performing a job, the design of
an optimum work method and the standardization of proposed work methods.
• Contributed immeasurably to the search for better method and the effective utilization of
this management tool helped in the accomplishment of higher productivity.
• A management tool to achieve higher productivity in any organization whether
manufacturing tangible products or offering services to its customers
• A generic term for the techniques of method study and work measurement. These
techniques are used in the examination of human work in all its contexts. They lead
systematically to the investigation of all the factors which affect the efficiency and
economy at the work place in order to affect improvement.

Objectives:
• To analyze the present method of doing a job, systematically in order to develop a new
and better method
• To measure the work content of a job by measuring the time required to do the job for a
qualified worker and hence to establish standard time.
• To increase the productivity by ensuring the best possible use of human, machine and
material resources and to achieve best quality product/ service at minimum possible cost
• To improve operational efficiency
• To determine the best or most effective method of accomplishing a necessary operation
or function
• Its’ main aim is to finding the best & most efficient way of using available resources i.e.
men, material, money & machinery.

This has benefited in the Increase in productivity and operational efficiency, reduced
manufacturing and material handling costs, improved work place layout and work flow, create
better manpower and capacity planning, has given way to fair wages to employees, as well as
better working conditions to employees , provides a standard of performance to measure labor
efficiency, better industrial relations and employee morale, basis for sound incentive scheme,
provides better job satisfaction to employees.
Method Study
The systematic recording and critical examination of existing and proposed ways of
doing work, as a means of developing and applying easier and more effective methods and
reducing costs.
There is a basic study procedure for this kind of cost reduction technique. These are the
following;
• Select the job or process
or the operation to be studied

• Record all relevant facts about

the job or process or operation

• Examine critically all the recorded facts

• Develop the new method

• Measure the work content and

establish the standard time

• Define the new method

• Install the new method

• Maintain the new method

Work Measurement
It is also called as ‘time study’. Work measurement is absolutely essential for both the
planning and control of operations. Without measurement data, we cannot determine the capacity
of facilities or it is not possible to quote delivery dates or costs. We are not in a position to
determine the rate of production and also labor utilization and efficiency. It may not be possible
to introduce incentive schemes and standard costs for budget control.
Components of Work Study

Three aspects:
1. More effective use of plant & equipment.
2. More effective use of human effort
3. Evaluation of human work