The eighth profit driver is Accounts Payable (AP). The AP function plays an important role in managing the cash flow cycles of the organization. The objective of most performance improvement projects is
Finding the opportunity with variable overhead costs requires trying to understand how these costs are allocated in the financial statements and then analytically drawing some correlations between those costs and the process hours.
When companies volumes decline they are often stuck with more fixed costs than they need. Fixed costs are often much more difficult to reduce than variable costs because they represent a longer term commitment in many cases.