Looking upon self for reflection can reveal awful lot of insights. This is almost true when a company reflect upon itself in regards to its profitability.
Cutting cost translates to higher net income retained by a company. Subsequently, a company now possess more fund to reinvest itself for unrealized projects and opportunities. While aggressive sales and marketing tactics can undoubtedly drive revenue, it is essential that companies review its expenses periodically. After all, a company cannot control shopping behaviour of customers, but surely it can control how much it spends on itself!
Reexamine Your Inventory
Excess inventory not meeting customers’ needs is considered waste. While optimism thinking may tell business owners that future sales will remove the eyesore. A better way to handle inventory to measure against sales data to keep inventory storage to a minimum.
Business owners should consider production for short term and long term sales. Which products enjoy stable sales throughout the year? Trend-dependent and seasonal products (example, any packaging revamp to match festive season) are meant for short term sales. Knowing what to produce is key to avoid waste in raw materials and funds.
Prevent overproduction
The precursor to excess inventory is overproduction. While business owners feel inclined to maximize the working hours of the labors, production will be continued and excess inventory will be stored.
Additional cost to maintain them such as transportation and storage will incur a hefty sum too. Hence, business owners should play smart and reduce the working hours of employees.
Avoid over processing
Extra work to fix preventable errors and defects is over processing. What resulted it? Human errors. Something as simple as data oversight can lead to undesirable outcomes in the production line. Defects should be easily avoided should there was detection earlier and proper procedures were followed.
Strict quality control must be enforced to prevent production of defective products which would only lead to waste of manpower and resources to repair the damage.
Smarter transportation
Products don’t leave warehouse unless business owners ship them out. The cost of fuel, automobile insurance, labour, and others will add up. While this is much ado nothing, data integration is another story. Multiple distinct input of data into system can be time consuming, and manual data management may result unwanted errors. To counteract this problem for better efficiency, business owners should consider business integration system. The system would help to manage and make data easily accessible to various parties for reference.
Lean Framework For Zero Waste
The reduction of waste equates to higher profits for the enterprise. For IT enterprises, this is desirable whereby the industry competition is fierce and investment in R&D is essential to be innovative. From the development to actual delivery of the product, lean IT enterprises stand a better chance to thrive.
