Optimizing Core Cost Drivers to Strengthen Cost Efficiency For most MSMEs, materials, energy, labor, and maintenance make up the bulk of operating costs, making these areas essential targets for improvement. Materials alone account for 50 to 70 percent of spending, and practices such as just-in-time inventory can reduce carrying costs by 15 to 25 percent. Partnering with a small group of reliable suppliers ensures better pricing and consistency, while daily waste tracking often uncovers 10 to 15 percent savings. Energy costs,