If cost-reduction is your target, you have an easy job! Close your facility and you’ll have no more cost!
Ridiculous? Indeed. Nevertheless you are probably steering on cost reduction… But low cost is not the goal of your organization!
What IS your Goal?
Think about what ís the goal and achieve this in the most effective way. You will learn that low cost than becomes a logic result of high quality!
You don’t believe this? Do you really (REALLY) know what determines the cost of you services or conversions? Then you’ll also know that most of the cost are made by non-value adding activities or even non-activities!
As long as you do not know the difference between what is adding value to your business (and its stakeholders) and what is not, you will spend tons of your time and resources on things you might as well not have done. In other words: you are shredding your own profit!
Shocking? Indeed! And it is your task as a manager to create a system that allows your employees to ultimately add value to the one party that brings the stuff that fuels your business: The customer! All the others come and eat from this fuel! Important of course! But only óne party brings the fuel!
So your only added value as a manager is to manage this change towards a loss free organization. And this is never ending, because the customers demand will keep changing, whether you like it or not!