78 ◾ The Innovative Lean Enterprise
Depending on the type of business, lowering fixed cost can be a continual
process. With respect to variable costs, the best place to start is to remove
costs and labor from the offerings your company delivers. For example, vari-
able costs can be removed from products by switching to lower-cost materi-
als, removing components by consolidating features of multiple components
to a single part, using lower-cost manufacturing methods, reducing the
number of touch points, i.e., removing assembly steps, etc. Again, depending
on the type of business, companies have numerous options in lowering the
overall cost of delivering customer value. Thus, companies must understand
their cost structure so they can produc