The Systems Thinker Blog

Cost Reduction: Make Products and Services Better, Faster, Cheaper!

Posted byRon Carroll

Years ago, I went into a local printing shop to do business. The proprietor had a sign on the back wall that read:

Good-Fast-Cheap

I got a chuckle out of the sign, but at the time, it made some sense to me.  I could understand that:

    • If I want the best quality and the lowest price, I may have to wait.
    • If I want the best quality and the job rushed, I should expect to pay a higher price.
    • If I want the job fast and cheap, I probably won’t get the highest quality.

Of course, like every customer, I really wanted my print job with the highest quality, as fast as possible, and at the lowest price. I wanted GOOD, FAST AND CHEAP!

Breakthrough Principle

Upon becoming a Systems Thinker, I learned that it is quality and speed that create the lowest possible price. You and your customers can and should expect all three!

QUALITY + SPEED = LOW COST


By creating business systems that have minimal mistakes, defects, and rework (good), you will reduce waste and increase process speed. By eliminating delay, downtime, and other speed bumps, you will boost sales throughput (fast). This powerful combination will give you the lowest possible cost and your customers the greatest value (cheap). Remember: Quality plus speed equals low cost.

Side Note: To increase speed without losing quality, don’t push workers beyond reasonable performance standards. Instead, focus your efforts on reducing the idle time in a business process—the time things are sitting around waiting to be worked on. Keep work-in-process to a minimum. Eliminate over-flowing in-baskets and items stacked up in cues or on pallets. Create an even and steady workflow.

Happy Customers and More Profit

In short, low quality and slow speed are what make business processes—and the resulting products and services—more expensive.

Whatever your business—in the office, the store, on the production line, or delivering a service—use well-designed business systems to get work done efficiently and effectively. Increasing quality and throughput (rate of speed) will guarantee happy and loyal customers. And you can take that to the bank!

 

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Tags: Business Systems, Quality, Efficiency/Speed, Cost Cutting