Productivity Knowledge Base: Saving Money at Any Cost

At a manufacturing plant, the accountant needed to make his monthly numbers. So, he refused an hourly worker's request for approval to buy $180 worth of water treatment supplies until the month had closed. The delay was about two weeks.

Two weeks was enough time for the old chemicals to lose their power and for algae to rapidly grow in the system. This shut down two cooling towers, deprived a production area of its cooling water, and compromised the chilled water system. Damage was $14,000. This accountant saved money--$180, to be exact--at great cost.

In his own mind, he was doing his job. He was meeting the monthly numbers, by "holding down costs." What he didn't understand was some of those costs prevented much larger costs. So it is with productivity measures.

What measure are we talking about? Consider if you've ever balked at spending money on any of these, "due to the cost:"

Training: Skills, teamwork, communications
Field tools: Identifying, maintaining, cleaning, storing, barcoding, calibrating, replacing, upgrading, and the training to use them safely and efficiently
Procedures: Writing, revising, teaching, implementing, using
Forms: Updating, culling, targeting
Materials: Identifying, consolidating, replacing, upgrading,
Back office systems: computers, software, phones, copy machines, spare parts, accounting systems, estimating systems, Web tools
Vehicles and equipment: Equipping, stocking, maintaining, cleaning, inspecting, replacing, upgrading, and the training to use them safely.

This is only a partial list. Before you say "no" to an expenditure, try to determine the actual cost of going without. It may be far more than you want to pay--or are able to.