The Systems Thinker Blog

Cut Costs Like the Big Boys!

Posted byRon Carroll

Do you get up every morning thinking about how you can improve your business? Improvement should be the most fundamental goal of every business owner and entrepreneur. Says who? One of the largest and most successful companies in the world, that's who!

Continuous and unrelenting effort to improve business systems and processes is the only way to develop excellence in people and organizations. Each day provides new opportunities!

In marketing and sales, we strive to improve our methods for finding good customers. In operations, we focus on improving the customer experience and on taking costs out of the business.

How to Cut Costs

The only way to remove costs is to eliminate wastethe defects and delays found in every business process. Your business operation is riddled with waste, most of which goes unnoticed.

A faucet dripping one drop per second wastes over 2000 gallons in a year. Similarly, the small leaks in your business systems and processes are costing you thousands of dollars annually.

So, what are you going to do about it? I suggest you take the advice of those who have built the world-class organization I referred to earlier. Please watch this one-minute, eye-opening video! (RSS Feeds click here to view video)


Now, do you see that even the big boys do little things to plug the leaks in their business systems? For Wal-Mart, the space between boxes on a conveyor belt is waste; it represents lost time in the process of dispatching millions of boxes and thousands of trucks from their distribution centers each day.

Furthermore, it used to be a common practice for fabric-store clerks to give the customer an extra thumbs-worth of material to be sure they had enough. It was also common to measure a yard of fabric and then fold it over twice for a three-yard purchase. Wal-Mart taught their managers how to improve their system for measuring fabric, an annual saving of about $2500 per store (11,000 stores), or an astounding $27,500,000!

Improve Your Business Systems

You have the same problem as Wal-Mart, but on a smaller scale. So, start thinking how you can take waste out of your business systems and processes—how you can take costs out of your business.

A few saved dollars here and there add up quickly. With a day’s worth of savings, you could treat your favorite person to a night on the town, by the end of a month—a summer cruise, by the end of a year—maybe a vacation home on the beach. It all starts with plugging the leaks, one business system at a time!

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


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Tags: Improvement, Cost Cutting