Reducing costs of purchased goods and services by an average of 5% per annum based on this year’s expenditure- this will be done by ensuring that there is maximum utilization of resources. With technology and employee training, fewer costs will be involved in the production process and this implies less expenditure. The measuring of this objective will be by comparing earlier expenditures with the current and calculations done to see the percentage difference.
Reduce incoming material defects from a current average of 1 in 1000 to less than 1 in 20,000- this will be ensured by a thorough inspection of the ordered materials. This may mean paying after thorough inspections. Further, there will be clear rules for the suppliers with set conditions on the repercussions if it happens that the defects are more than the set