When management has asked you to go for cost cutting, as a manager what should be your best options?

Here are the options - some easy some difficult 

Undertake full review of all cost of sales elements and obtain fresh quote from existing vendors. Identify new vendors also and obtain new quotations to negotiate with existing suppliers.

Look at raw material and parts inventories lelvels. Reduce stock levels to free up cash and reduce interest costs,

Negotiate with suppliers to extend credit terms. 

Follow up debtors to pay in time. Provide nominal cash discounts to customers to pay early and save interest costs.

Undertake technical reviews to lower costs by lowering specifications without compromising on quality. Alternatively, get marketing and technical heads to see if product quality can be lowered where it is at a level not required by customers to achieve lower costs.

Review Capital expenses program and implement Zero base budgeting to stop compulsive & unnecessary capex.  Initiate Buy vs Lease studies to identify savings.

Review Headcount in each department, which has more than2 staff. Usually all organisations gather some extra manpower which can be trimmed, See if some departments / functions have become redundant and can be substituted with computer based solutions. Examine outsourcing as a cost saving device.

Review overtime to see if this is really necessary. Cut down on administrative overtime.

Review bonus and incentive policies to weed out the undeserving.

Start monitoring discretionary overheads closely e,g, fuel expenses, printing, stationery, maintenance. Start comapring multi vendor quotations to achieve cost reductions

Negotiate with banks for reducing bank charges and interest rates. There is always some scope here. 

Look at taxation closely. Income tax savings can be substantial if the expenses are categorised properly.

If management is asking for cost cutting then don't say no even if you are aware that scope is not much. In case of procurement of RM/PM , pls go for reverse auction and validate your cost of material.

Reverse auction is conducted by3rd party then it have weight age in the view of management.

 3rd you also go for industrial bench marking if you can get the rate of similar type of industry.

it sounds harsh but headcount

Renegotiation of Long Term Contracts  

That's always a tough decision, isn't it? and the alternative cost is the product/ service quality. As manager I believe it is very important to look at areas that might not have huge impact on the quality, or at least not in long term. I am sure you have a list of priorities but it really depends on each company's situation I guess.