Cost reductions can be attained through supplier consolidation (e.g., leveraging volume and choosing “best suppliers”), continual improvement (e.g., improving operational efficiencies, changing usage patterns, and eliminating inventories), and innovations. Analyzing the preliminary TCO and then performing in-depth analysis of the relevant cost component area(s) will lead to identification of the appropriate cost reduction levers. Additional information on cost avoidance and SCM impact can be found in Section 2-4, Formulate Project Budget and Request Funding.
