Cut Costs by Increasing Your Efficiency

In these troubling times every business seems to have one major goal -- cut costs. Unfortunately this happens most often as a knee jerk reaction with across the board cuts in payroll and everything that even smells non-essential. But what if there was a better way? And you could learn about it for FREE??

One of our clients has grabbed the Toyota concept of efficiency (lean) and taken it to an art form – and they are so passionate about it that the President of the company has felt the call to duty and is hosting a daily radio show on AM790 from 4 – 5pm. There is also a local website dedicated just to the war on waste (LeanRI.org). The show and site focuses on efficiency and cost cutting without using the all too common slash and burn process. If you can’t tune in, the show streams live from the 790 website and there are other tips you can read online. Here are some links to get you started.

http://www.790business.com/sectional.asp?id=35739
http://www.leanri.org/
http://www.facebook.com/pages/K-Dubs-Lean-Nation-Radio-Show/205913446176

What is lean anyway?
Lean is eliminating the 7 deadly wastes that are in every corner of our businesses, homes, and government.

1. Waiting - people or goods idle while a process finishes
2. Over production – making more than you need now
3. Over processing – doing more work than is necessary (too many steps)
4. Motion – reaching, turning, bending, or walking to your resources
5. Transportation – moving product around
6. Defects – we all know this one
7. Inventory – do you need more than you could have on-hand tomorrow?

I know these sound like they only apply to manufacturing but don’t be fooled. They apply to everything and anything that involves a process resulting in a finished product (even making toast has a process to it). What I’m saying is: everything is manufacturing when you think about it. For example (and I’ll pick a tough one) - an insurance agent. They might not have a machine shop but they do go through the process of obtaining leads, researching, quoting, revising, and ultimately binding coverage - all which results in the finish product of an insurance policy. Their equipment is a computer, printer, and fax machine instead of drill presses and grinding machines - but they still go through a process - and that process is burdened with the 7 wastes above.

You will never reach the perfection of a totally waste free environment but the idea is to continuously improve towards that goal. For a lot more on this topic check out one of the links above. You’ve got nothing to lose and it will make you look at your business in a whole new way.

By. Norman LeBlanc, CPA
Tax Services Group

Labels: Accounting, efficiency, KLR, LeanRI, LeBlanc