⚙ PART III · PRINCIPLE 46 OF 100
Cost Control
Manufacturing Excellence
॥ ORIGINAL SANSKRIT SHLOKA ॥
Arthashastra 2.15

व्ययं कृत्वा लाभो नास्ति यत्र, तत् व्ययं त्यजेत्।
व्ययः सम्पदां नाशकः॥


Transliteration (IAST)
Vyayaṃ kṛtvā lābho nāsti yatra, tat vyayaṃ tyajet.
Vyayaḥ sampadāṃ nāśakaḥ.

English Meaning & Translation
Where expenditure brings no return, abandon that expenditure.
Waste is the destroyer of prosperity.
The treasury is the sinew of the state. Waste it, and the kingdom weakens. Guard it, and the kingdom endures.
💼 Business Lesson
Effective cost control is not about refusing to spend — it is about ensuring every rupee is allocated to its highest-value use and that structural waste in the cost base is systematically identified and eliminated.
👑 Leader Lesson
Prevention is always cheaper than correction. Investing in process quality, equipment maintenance, and operator training to prevent failures consistently costs less than managing the failures when they occur.
⚙ Manufacturing Lesson
Manage your manufacturing cost base across four categories: Material costs (yield, scrap, procurement strategy), Conversion costs (productivity, energy, process optimisation), Quality costs (rework, scrap, warranty), and Overhead costs (activity-based review).
📜 APPLICATION TO MODERN INDUSTRY

Chanakya's management of the royal treasury was legendary for rigour. Cost control was not an end in itself — it was the mechanism that funded strategic investment and provided resilience for adversity.

✔ ACTION CHECKLIST
Implement management accounting reporting cost by product, line, and category
Track total cost of poor quality as a formal KPI — report monthly
Conduct annual overhead cost review — eliminate low-value activities
Set formal annual targets for material yield improvement and energy cost reduction
Require cost impact assessment for all capital investment proposals
❓ REFLECTION QUESTIONS
❓ What is your current total cost of poor quality as a percentage of revenue?
❓ Where have costs grown faster than revenue in the last two years?
"Cost control is not the enemy of ambition. It is the fuel of it. Manage costs with discipline, invest with vision."
Spend with Purpose. Save with Discipline. Invest with Vision.
46

COST CONTROL

Spend with Purpose. Save with Discipline. Invest with Vision.

"Cost control is not the enemy of ambition. It is the fuel of it. Manage costs with discipline, invest with vision."
व्ययं कृत्वा लाभो नास्ति यत्र, तत् व्ययं त्यजेत्।
HEAVY METAL & TUBES (INDIA) PVT. LTD.
MORE FROM PART III: MANUFACTURING EXCELLENCE
41. Quality First42. Continuous Improvement43. Process Control44. Root Cause Thinking45. Productivity47. Waste Reduction
View all Part III principles →