Sara El Kareh
Companies’ main concern is how to preserve their profits with the economy retracting, the customers’ doubts and the suppliers cutting down their production. It might be impossible that you double your net revenues but this may happen if you make personal efforts.
1. Keep it simple
Not everyone follows the updated technologies in the production stage and that might cost money and the efforts made are wasted. To cut down from the money wasted and push the net revenues a bit higher, search for slips and remove anything that should not be used to get a work accomplished. The work is simplified when the confusion is lost.
Finding and classifying the materials and equipment is the second step to be done. This way, you can easily find the needed materials without wasting time searching for them when they are scattered all over the workplace.
Reconstruct your business by eliminating all the obstacles and rebuilding in order to reduce any delays in delivery. Lazy Product syndrome (LPS) is a disease that affects all businesses. The product becomes worthless when the employee gives it 3 minutes of his time in one hour (the 3-57 rule). Therefore delivery might need weeks instead of hours.
The production must meet the demands of the market and not more. A company could print 100,000 newspapers daily, but only 30,000 copies per day were sold. The other 70,000 had to be thrown away. These unsold newspapers consumed a lot of time and efforts but resulted in trash. Making only 30,000 daily is more beneficial for the company can now focus on other tasks.
The productivity may increase and 20% or more of the costs are reduced, if the adopted system is simplified and organized. Not to mention that the workflow can be faster with a minimum of efforts needed. Simplifying and organizing increase the errors and high cost of redoing a job.
Mistakes, errors, and flaws are found within every business and they lead to junk, low revenues and rework. Therefore, the mistakes must be categorized and calculated in order to upgrade the delivery of the products or services.
Calculate the following:
- Count the mistakes found in the product or service, from the initial sales order to delivery and consumption.
- Calculate the times fast food outlets didn’t offer a perfect service at the drive-in window.
- Count the products that don’t fulfill the needs of the customers and fail them.
Categorize the following:
- What are the most common types of mistakes or defects?
- In which phases of production these errors are made?
- What is the cost of each mistake?
Categorizing the errors helps you know where they work in a cluster. As a matter of fact, 4% out of every 100 errors cause over 50% of the defects and lost profit (the 4–50 rule).
If you don’t allow the errors affect your improvement only then you will be able to find the main causes and possible solutions. Weirdly enough, a company doesn’t always need more money, more people, or more training. To solve the issues it’s always important to change the procedures that prevent the problems.
Simplifying, building, and upgrading operations, are the 3 main factors that double the profits. Start applying today even in your own workspace.