This PPT slide, part of the 97-slide Strategic Cost Reduction Training PowerPoint presentation, titled "SCR Best Practices – Build Cost Baseline" outlines a framework for establishing a structural cost baseline by categorizing costs into 'Verticals' and 'Horizontals.' The primary focus here is on how functional areas within an organization can be aligned with their respective cost elements.

At the top of the slide, various operational functions are identified, including Operations, Maintenance & Engineering, Finance & Human Resources, and Marketing & Sales. This categorization emphasizes the importance of viewing these functions as distinct verticals. Each vertical represents a specific area of the organization, which is essential for understanding where costs are incurred.

Beneath these functional areas, several cost components are listed, such as Salaries & Incentive Compensation, Benefits & Pension Costs, and Indirect Materials & Services Costs. This breakdown illustrates the granular approach needed to analyze costs effectively. The slide suggests that by aligning these cost elements with the organizational structure, businesses can gain insights into their spending patterns.

The central message is about the necessity of a structured approach to cost management. By dissecting costs into manageable components, organizations can better identify opportunities for efficiency and potential savings. The visual layout reinforces the interconnectedness of various functions and their associated costs, making it clear that a comprehensive understanding of these relationships is vital for effective cost management. This slide serves as a practical guide for executives looking to refine their cost structures and drive operational efficiency.

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