The Case for Cost Control in this Economy
So what is it with this economy, and how does it affect what your business should do, can do? Productivity is always a good tactic, with improvement possible in all areas of a business. Tried and true cost control articles are available below for your use, And please, don’t just look at direct hourly people for improvement. That is probably not where your big costs are. Show me the money.
Choose the ideas that apply to your business; you will find that most can be put into effect pretty quickly, with a benefit likely to be much higher than the cost. Set up a priority and focus on those few items that influence the largest productivity result. Read the articles for some strategy and a lot of particular guidance, then call Jackson Productivity Research Inc. for help to plan or implement. These articles will add some value to your effort, but really can’t be specific enough to act as do-it-yourself guides. Don’t try this at home as they say, get some professional help. See the article Can a productivity consultant add enough value to justify the fee?
A. Operating ideas, 10 topics Many of these suggestions were developed for the manufacturing production floor but experience tells me that the concept if not the specifics apply to most other endeavors, where people or equipment perform work for a business purpose.
1. Set expectations, measure and communicate; Results Count
You, and I, and the people in your company want to know what is expected of them (and their work group and the company) and how well they do against expectations. Measure productivity, and the results. In this economy, people are more apprehensive than usual, so expectations and measurement and communication are even more important.
2. Productivity Improvement and cost reduction
Inexpensive and quick actions to raise output and / or lower input in your organization, whatever your line of business. Act to raise profits or output, to ease bottlenecks, to refine operations that have lost their sharp focus over time or start effective new ones.
3. Management 555 for Today
I wrote this advice for my son as he entered his first management job, as a managing editor of an e-zine. Shortly it went under in the dot com bust, but the content is still sound.
4. Motivation
There are employee engagement and motivation programs from ABC Analysis to Zero Defects, and many work well at least for a time. But employee motivation is pretty complex, and this article outlines the ideas of three who knew it well.
5. Manufacturing productivity tool belt
Use this checklist to review your own manufacturing operations; follow them to the more significant opportunities to improve productivity, to cut cost and add output.
6. Lean Manufacturing and the Toyota Production System, Success and Failures
The Toyota Production System has been a roaring success at Toyota, but much less effective in other locations. Several qualified sources explain this disconnect.
7. Capacity, Utilization, Constraints
Capacity and constraints are linked; as constraints are reduced then capacity will rise. Read of some basic and some more sophisticated ways to increase the capacity of your operations.
8. Work Measurement and Time Study
In any organization where people or equipment contribute to output, customer service, or cost, work measurement is the first step, an objective basis, for many management tools. Work Measurement is just as effective in the office, the lab, the maintenance shop, the field, the customer service unit, and the warehouse as it is on a production floor.
9. Plant Layout, Facility Layout, Factory Design, Floor Plan
Layout, or the physical organization of people, materials and machines within a workspace, is at the very heart of productivity. For an existing business, a revised layout can often cut operating costs and add capacity. For a new facility, design and layout are critical to optimize construction cost yet provide for long term operating efficiency and room for growth.
10. Can a productivity consultant add enough value to justify the fee?
Maybe so, maybe not depending on the project scope and your own resources. This article is a guide to determine how to predict in advance if a consultant will pay for himself / herself, much less create a return in this economy.
The key; what resources can you apply, considering your circumstances
In this article, you will observe that I suggest that management must commit itself to receive a payback from a productivity consultant. The more management opens up, to investigation, to consideration of new ideas, to judgment of sacred cows, to re-prioritization, the more useful any consultant can be. If you are willing to commit, let’s talk.
B. Facility planning; get it right.
Facility characteristics are deeply involved in the P & L and in the balance sheet; it is a fact that both sales and costs share a common dependency on facilities, which must produce to meet sales demand at a low cost. Obviously it is important to get it right, for a corporation’s short and long term prospects. Good luck with your strategy and actions.
Facility strategies include six titles, which have a direct and rapid relationship to cost control in a rigorous economy.
1. Merger or consolidation of business, operation, plant or facility; facility actions
In a difficult economy, consolidation or merger is a popular strategy, because it concentrates the resources necessary for successful operation and uses economies of scale to minimize cost. See Consolidate or merge equipment, facility and process below, for a specific plan.
2. Relocate for cost reasons, or to access qualified employees or support
It is certainly possible for a business to cost justify another facility, instead of or in addition to, because of access to qualified employees or specialized vendors and support; location-sensitive operating costs, community incentives and tax combination, regulatory climate.
3. Offshoring and the tough questions to answer
Are you thinking of taking your manufacturing offshore? Can you spell Melamine? Lead paint? SARS? Tough questions that will probably lead you to realize that Asia is not for your U. S. company.
4. Consolidate or merge equipment, facility and process
If your organization is faced with a consolidation or merger of facilities, through choice or because it has been imposed by market forces, a successful facility project can create an effective, productive enterprise, maximize operating and distribution synergies, and achieve the original objectives of the consolidation.
5. Office relocation, expansion, merger, a special case
Office moves are often less complicated, but offer some peculiarities of their own which this article identifies, along with suggestions to deal with them.
6. Does your company consider an expansion in the US?
Perhaps your company will not invest $4.1 billion in a new plant in Alabama as ThyssenKrupp AG will, nor negotiate an incentive package worth $811 million. But if your company considers an expansion into the US, read on. It is possible to quantify in advance what your operating costs are likely to be, and find which facility location will optimize costs, access to qualified labor, customer service, and shipping. Even in this economy.
Jack Greene, Jackson Productivity Research Inc.
The Case for Cost Control in this Economy - To learn more about this author, visit Jack Greene's Website.
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Jack Greene
(Visit Jack's Website)
Jack Greene is president of Jackson
Productivity Research Inc. He writes about
practical business actions which even in
today’s economy will control and reduce
costs; plant layout; time study;
motivation; productivity improvement;
capacity, constraints, and utilization;
merger and consolidation of facilities;
cost justified relocation within or into
the US.
Jack uses his experience in dozens of
productivity improvement, work
measurement, cost reduction, and layout
projects; for large and small companies,
US and international, as a basis to share
insights. He recognizes that a business
must continue to satisfy customers and
produce quality product even while
controlling costs. The articles address
all businesses because they deal with
people and the elements of work; with
efficient facilities, tools and equipment;
with successful management practices.
Mr. Greene established Jackson
Productivity Research in 1991, and
previously headed division or corporate
industrial engineering for three Fortune
250 companies; ITT, Abbott Labs, and
Bausch & Lomb.
Jack Greene Jackson Productivity Research:
Productivity is our Middle Name jack@jacksonproductivity.com jac
ksonproductivity.com
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