1. Select an item that has a high annual dollar volume. This can be material, a purchased item, or a service.
2. Identify the function of the item.
3. Obtain answers to these kinds of questions:
a. Is the item necessary and have value, or can it be eliminated?
b. Are there alternative sources for the item?
c. Can the item be provided internally?
d. What are the advantages of the present arrangement?
e. What are the disadvantages of the present arrangement?
f. Could another material, part, or service be used instead?
g. Can specifications be less stringent to save cost or time?
h. Can two or more parts be combined?
i. Can more/less processing be done on the item to save cost or time?
j. Do suppliers/providers have suggestions for improvements?
k. Do employees have suggestions for improvements?
l. Can packaging be improved or made less costly?
4. Analyze the answers obtained above, as well as the answers to other questions that arise, and then
make recommendations.
