Any successful business will tell you that keeping operational costs down is not just smart but essential to its well being and ultimate survival. The formula is simple: make sure that what’s coming in is more than what’s going out!
But there is often an overlooked but limited commodity that affects costs…Time! The interesting thing about time is that we’ve all been given the same amount of it…24 hours or 1440 minutes per day. It’s the one common element about us.
Think about it, everyone you may know, every sports figure or celeb you may look up to has the same 24 hours. They use it wisely and derive benefits from it or waste it away. In a typical work day (let’s call it 8 hours for now) time can slip by quickly. And if that time does not return investment, the day is a complete waste of time. Continue this for a few days and see what happens; you will quickly see your business take a turn a direction you do not wish to see it go.
Time vs Production
If you’re an owner of a business production time equates to dollars made or lost during a shift. As an operations lead on multiple production lines your performance is measured by how efficient your processes are running during a shift. The more you can produce in the less amount of time, the more money you make the company, and the longer you keep your job, promoted or receive a bonus at the end of the year.
If you’re in the Consumer Packaged Goods industry, the Wine industry, the Pharmaceutical & Nutraceutical industries, or any industry that applies labels to finished goods for resale, one of the areas important to you is labels. Specifically, the application of the custom labels you are procuring.
A not so uncommon scenario
Let’s assume your machines are in top condition (optimized to run at top speed), your shift is on time, and you are ready to fill and label. You start the labeling process and your supervisor comes to tell you that the liner is snapping. Of course she has has a couple of people fussing around with it as she enters your office so ‘time is not being completely wasted’. You come out to take a look…it’s still breaking. You tell them to switch rolls…same thing. You pick up a random roll…it seems to work. You head back to your office and call procurement to get in touch with your label manufacturer immediately. If they care, they’ll be on their way with a solution right away.
Now let’s take a look at time as it relates to some very basic costs for you here:
- shift staff standing around at $12.00 + per hr
- supervisor salary at $14.00 + per hr
- Your salary at $19.00 + per hr
If we assume a typical down time of 3 hours this ‘snap’ would have cost your business $918.00. That’s just based on 10 employees, including the profit you would have lost. And if you are dealing with retail, you can expect back charges for being late when shipping. It could be worse, but let’s just keep it simple here.
Thankfully there are some basic ways to avoid these scenarios.
Some solutions for you
- Make sure your label supplier understands your business and product needs completely. If you sense they don’t, find someone who does.
- Make sure your label supplier has a Quality Assurance department. They should have written procedures in place to avoid disruptions in their own and ultimately your business. One of the purposes of a QA department is to inspect and catch problems before shipping to the customer. If they have implemented Kaizen (a Lean Management culture) even better for you. In this respect, you may wish to check if they have GMP (Good Manufacturing Practices) in place, considered one of the highest Quality Standards for the Pharmaceutical industry.
- Plan your production ahead of time. Allow yourself ample time for something to go wrong and have a back up plan. Depending on the size and scope of your business it may be wise to have a back up label supplier who is hungry for your business and you can count on.
The next time you think about time. think about what it’s costing you!
“Heck by the time a man scratches his behind, clears his throat, and tells me how smart he is, we’ve already wasted fifteen minutes.” Lyndon B. Johnson