The perpetual struggle of price versus cost
In times of economic challenges, when the manufacturing sector is under constant pressure to improve profitability, those empowered to ensure a positive return on investments are often engaged in a perpetual struggle of price versus cost.
But spending less today does not mean you will spend less tomorrow. | |
The search to lessen the purchase price of the components, materials, etc. required for production, in order to reduce cost of production, is full of traps. While the immediacy of price reduction is recognized, its affect on the bottom line is not nearly as great as is the effect normally associated with overall cost reduction as a result of increased component performance.
The following information will enable Sandvik Coromant to prove that same theory to be true in machine tooling. While reduced prices in tooling would result in an initial cost reduction, that result is negligible when compared to the profound reduction in cost made possible by enhancing productivity.
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