The lean thinking in overhead cost-cutting
The lean thinking in overhead cost-cutting

Summary/Abstract: This paper addresses the problem of administrative overhead costs reduction, showing possible results that can be obtained with an application of value engineering tools and the Mudge Diagram in particular. Its objective is to investigate uses of this technique in rearranging structure and costs of internal administrative functions to lower the overhead costs while preserving value and functionality of company’s administrative support at the same time. In order to identify and analyze the possible applications of this technique, an essential literature review was carried out. As an example of the use of the Mudge Diagram in the identification of the opportunities for value preservation, cost reduction and calculation of the potential results of such a systematic approach, human resources department was analyzed. An appriopriate simulation was performed in order to present the possible patch of application.

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