Analysis of Raw Material Participation in the Production Process. Part II, Practical Aspects

Abstract

Companies searching for a key to further development and maintaining an advantage over their competition pay attention to various factors. Some invest in technological innovations, other choose process and organisational structure optimisation, some focus on building an organisational culture promoting effectiveness or search for new market opportunities. This publication will focus on those companies, which build their position among their competitors based on properly implemented loss elimination strategy. Therefore, the purpose of this publication (a second part of an ongoing cycle) is to analyse the selected products focusing in the participation of raw material purchase cost in the total production cost of a given product. This will allow to propose a strategy in the upcoming part, which will have a measurable effect on lowering the production costs and increasing the value of the production plant.

Do Growth Spillovers Matter?

“…The company must minimize the production cost to sustain its competitiveness. Most of the production cost is the purchase of raw materials (Niewiadomski & Pawlak, 2016), so the firm always searches for lower-priced inputs, including input supplied from other regions. The input movement from other regions needs excellent transportation facilities.…”