what is an example of a company?s main cost drivers and how would they be able to lower their cost driver if needed?

A common example of a company's main cost driver is "labor hours" or "labor costs," especially in service and manufacturing industries. Labor costs include wages, benefits, training, and retention expenses. To lower this cost driver, companies can implement strategies such as flexible work arrangements (remote work, part-time work), cross-training employees to cover multiple roles, automation of repetitive tasks, strategic staffing using data analytics to match labor supply with demand, and employee retention programs to reduce hiring and training costs. Other typical cost drivers can include raw materials (for manufacturing) and machinery operation hours. To reduce costs related to raw materials, companies might renegotiate supplier contracts, optimize inventory management, or substitute materials. For machinery costs, improving efficiency through maintenance and limiting operation time can help reduce expenses. Overall, by analyzing the main cost drivers specific to their operations, companies can adopt targeted actions such as process improvements, technology investments, supplier negotiations, and organizational restructuring to lower these costs and improve profitability.