The cost reduction of Pakistan Telecommunication Corporation Limited

Pakistan telecommunication Corporation Limited is the biggest telecom service supplier company in Pakistan. As now the universe is going a planetary small town, so it is of import to acquire connected to everybody.

PTCL is supplying their merchandises and services for the 1000000s of people across Pakistan. They are puting free the spirit of invention. PTCL is the pick of most of the clients as it is for past six decennaries.

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Here in this study we will analyze PTCL with regard to be decrease. We will seek to understate the cost of production of goods and services by utilizing tools like value analysis and value technology. In add-on we will besides discourse the direction procedure.

Cost decrease can significantly cut down the cost of a merchandise or services. We can besides analyze and measure cost decrease techniques in footings of impact on the company or organisation. We can implement the schemes suitably by prioritising the ends of cost cutting plan. There are assorted grounds that cost decrease techniques are of import for an organisation. Cost decrease techniques can demo the manner to a company to be economical, by enforcing a regular reappraisal of what they are passing at every degree of the organisation. It can maintain a company dynamic and efficient.

In many markets, houses compete over clip by using resources with the intent of cut downing their costs. Sometimes the cost cut downing investings operate straight on costs. In many occasions, they take the signifier of developing new merchandises that deliver what clients need more cheaply. Therefore merchandise development can hold the same ultimate consequence as direct cost decrease. In fact if on thinks of the merchandise as the services it delivers to the client so merchandise development frequently is merely cost decrease.

In this study we will discourse some of the cost decrease schemes and we will seek to use those schemes on the company selected.

Cost Reduction Strategy

We can cut down the cost of merchandise or service by implementing different schemes. There are different techniques and ways to implement these schemes. We can cut down cost by using the schemes mentioned below.

Cost decrease by design

Overhead cost decrease

Thin production cost decrease

Standardization cost decrease

Quality cost decrease

Value Analysis /Value Engineering

Through improved job resolution, creativeness and determination devising we can increase the value of our merchandise or services either by keeping our quality while cut downing cost, keeping our costs while increasing quality or when needed both ( D.Miles, 1993 ) .

Value Engineering highlights the application of value methodological analysis to streamline current twenty-four hours operations, strategic planning in company or concern sections, and mundane concern determinations in the private sector ( Younker, 2003 ) .

What is value?

Value is a personal position of your willingness to pay for the end product given by a merchandise, procedure or undertaking.

Good value is achieved when the required end product can be accurately defined and delivered at the lowest life rhythm cost.

Value Engineering

Value Engineering improves value. For illustration on main road undertakings, betterments to value might include cut downing the life rhythm cost of an interchange, heightening safety in a design, or cut downing impacts to the populace by shortening the continuance of a building undertaking.

Value Engineering uses a combination of originative and analytical techniques to place alternate ways to accomplish aims.

The usage of Function Analysis differentiates Value Engineering from other job work outing attacks.

Value technology focal points on presenting the merchandise or service at the best monetary value by incorporating those value features considered most of import by the client.

Function Analysis

Function Analysis is an active verb and a mensurable noun which describe a map. Basically it explains the working of anything.

Working Analysis of Value Engineering

Value technology trails an organized idea procedure to bet on options. Every session of value technology has a figure of stairss:

Gather information

What should be done now?

Measure Performance

How will the options be measured?

Analyse Functions

What to make?

How much will be the cost?

Brainstorming

Options

Evaluation and Ranking of Ideas

Taking out the best thought

Develop and Expand Ideas

What will be the impacts?

What is the cost?

What is the public presentation?

Showing the thought

Sell Options

Benefits of Value Engineering

Value Engineering is a tool that we can use it to better our ability to pull off different undertakings, invention, job resolution and communicate.

A value technology plan in an organisation will supply staff with a decisive tool to develop and better value in any undertaking, merchandise or procedure.

If we talk about the results of value technology, there is a long list of the result but I will portion few of them in this study. The major results of value technology are cost nest eggs, agenda betterments, hazard decrease, better coaction and improved designs.

Letaa‚¬a„?s take an illustration of a telephone which PTCL is doing in its mill.

Function of Telephone

Receive Calls

Dial Calls

Internet

Facsimile

Entire Value of map

Components

Cost

Value

70

60

80

30

Receiver

70

4040

3020

70

Keypad

50

3030

2010

50

Body

30

3010

30

Circuit board

90

2020

3010

2080

2020

90

Entire cost of map

70

60

80

30

Table 1, Analysis of Components and Functions

As we can see in the tabular array above the analysis of the map of the phone and its constituents, that is called value analysis and we give a certain value to all the constituents and its maps to calculate out the least effectual constituent with regard to the map. This method is use to cut down cost of the constituents which are less of import or we can cut down puting more money on those constituents.

Entire Quality Management

Entire Quality Management is a wide-ranging and organized attack towards the direction of organisation that want to better the quality of services and merchandises through on traveling sweetenings in response to uninterrupted feedback. Every administration has their ain entire quality direction demands or the administration may hold association with the other criterions, such as the ISO ( International Organization for Standardization ‘s 9000 series ) . Entire Quality Management has application on all sort of administration ; its beginning is fabricating but it has been adopted in about every sector of administration, including route care, schools, hotel direction, mosques and churches. In the modern epoch, e-business is turning quickly, now entire quality direction is based on the direction of quality from the client side.

Entire Quality Management procedures are divided into four classs

Plan

Make

Check

Act

In the planning stage, we identify the job, the 2nd measure is to specify the job which we need to turn to, roll up all the relevant information and figure out the root cause of the job.

In the making stage, we have to develop and so implement a solution for the above mentioned job and we have to besides mensurate that how effectual it will be.

During look intoing stage we compare the consequences before and after the solution was implemented.

In the acting stage, we have to document consequence, convey this info to others about the alteration in procedure and we have to besides do recommendations for the job which we have to discourse in following rhythm.

Activity Base Costing

Today, ABC is the emerging footing of public presentation direction. If you study public presentation direction system in deepness, you will happen ABC powering public presentation steps for scorecards, supplying rates for client profitableness analytics, assisting devise human resource programs, patterning sustainability, and back uping budget development and planning ( Turney ) .

In a cost based activity, costs are divided into units and non-units based classs. Activity based bing admits that some costs vary with units produced and some costs do non ( Hansen, Mowen, & A ; Liming, 2007 ) .

Benefits of Activity Base Costing

It provides a deep apprehension of the least growth and fastest turning component of cost operating expense.

Activity base costing helps us to better budgeting by placing the relationship between cost and public presentation at different service degrees.

Because planning and control are directed at procedure degree, ABC encourages betterment on uninterrupted footing and besides entire quality control.

By supervising the entire life rhythm cost and public presentation it improves the profitableness.

Activity base bing Acts of the Apostless like and span and links corporate scheme to determination devising at operational degree.

By placing the non-value added activities, it fundamentally assist us to dispose off or extinguish waste.

It helps us to better our procurance procedure, gauging, and pricing determinations that are based on the cost of the merchandise, which reflects the fabrication procedure.

Decision

As we have discussed different methods and schemes to cut down cost and make value analysis/value technology. In the instance of PTCL, they can besides utilize these methods to cut down their fabrication cost. The best manner to make it by utilizing value analysis, As PTCL is the biggest service supplier of telecom service supplier, they should look into cost decrease earnestly to cut down the cost of production.

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