Cost savings or cost shift

It is pointed out that, due to international competition, US businesses are under considerable pressure to reduce operating costs. Many large corporations have introduced cost savings programs. However, there is a danger that these programs can encourage cost shifting rather than cost savings. Often savings are claimed by reduction or elimination of a function. If it is a service that must then be performed by others, there are no net savings, only a cost shift from one organization to another. Costs may also be shifted to the customer in the form of reduced service or quality. A total process management concept is needed to achieve real cost savings