Cost Red. Part 4

Business Solutions - The Positive Way, Cost Reduction and Profit Improvement

 

 

 

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Cost reduction and profit improvement for businesses

 

13.  How do CRP's interact with other programs?

    A CRP can be a part of an improvement program, a focal or measuring point for a blend of improvement programs, or the catalyst for innovation and improvement. It's a great way to keep score as actual dollars saved are tallied and reported on an ongoing basis. The contribution to profits is significant, as a dollar saved is a dollar earned. CRP's can blend well with and complement other programs such as: TQM, ISO 9000, Continuous Improvement, Reengineering, Safety programs, Environmental programs, Industrial Effectiveness Programs, Six Sigma and the like.

14.  Why do CRP's occasionally fail to meet expectations:

Occasionally programs will fail to meet expectations. We have found two primary causes: 1. The program is not fully supported by top management so when resistance is met it tends to diminish in its priority and resource allocation. and/or, 2. Design and training have not been adequate. Other common causes include the following:

bulletSystemization was inadequate or inappropriate.
bulletReporting was insufficient.
bulletThere was a lack of authority to control expenses by people charged with responsibility.
bulletPeople were not accountable for their expenditures or program compliance.
bulletSelection criteria were improperly used.
bulletThe program was not designed to accommodate change and growth.
bulletThe program didn't plan for the inevitable cycles of enthusiasm.
bulletIt turned into a suggestion program without clear methods and goals.

 

15.  Fourteen questions to consider to make sure the program works as expected:

 

Key questions to consider in regards to a CRP include the following: They should be asked and answered for your organization, as the answers are dependent upon the exact nature of your organization and your needs.

 

  1. How to maximize the potential for the program?
  2. How to overcome the natural human resistance to change?
  3. How to tailor the program for your organization?
  4. How to identify opportunities?
  5. How to train the appropriate personnel?
  6. How to take action once the ideas are found?
  7. How to keep score?
  8. How to determine what counts as a savings and why or why not?
  9. How to account for one-time savings versus ongoing savings?
  10. How to ensure ownership of the program?
  11. How to build it to last?
  12. How to incorporate a CRP into other programs or vice versa?
  13. How to identify and tap supporters and contributors while overcoming resistance?
  14. How to provide recognition for success?

 

The program and its documentation should be as simple and straightforward as possible. Rules and examples should be clear and tailored for your specific organization. Be sure to provide reporting forms (paper and/or electronic) to everyone that needs them. Appoint a clerical person to assemble and report the progress on a regular basis.

Nominate a program leader/coordinator who people will follow, train them well, then give them the tools and the authority and go to work.

 

Set target and stretch goals for achievement. Don't be afraid to reach. Award people for achieving their goals.

16. How you can install a new program or optimize an existing one:

We recommend that you complete the evaluations and consider the contents of this paper. You should then have a good idea of what an effective program consists of. You can build a program yourself using this paper as a guide or you can engage experts like The Positive Way to help you do the job in a very cost-effective manner.  It is an investment that will pay you handsomely.

How ever you choose to proceed please remember to create and implement a program that will be compatible with the existing organizational culture even while you seek to change it. The best programs are well accepted by all stakeholders.

Consider your own organizational context carefully to ensure that you get the most benefit from your investment in the program. You will want your program to be alive and productive for a long time.

Steven C. Martin
President and CEO
Business Solutions - The Positive Way

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About the Author:

Steven C. Martin is a seasoned professional manager, problem solver, and efficiency expert with over 30 years of experience. He has successfully applied his methods and problem solving skills in a wide range of settings to save his employers and clients in excess of $100 million. He learned and perfected his Cost Reduction Program and Profit Improvement methods while working with multi-billion dollar corporations, smaller entrepreneurial companies, and his own businesses. Both large and small companies and organizations have used his proven methods to save money and improve their corporate health. His areas of focus have included manufacturing, sales, and service environments. He is available for training, coaching, lectures, speaking engagements, and private consultation for individuals and organizations. He may be reached at Business Solutions at 716-580-4564.  How much of that $100 million would you like to have?

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