Skip to main content

Your Business is Hemorrhaging Money…….


And you don’t know why it’s happening. Well, not surprising. Plenty of businesses are in the same boat because they simply do not see the BIG picture.

A Game for the Big Boys

A number of small and medium scale enterprises, SMEs, tend to think that loss control is one massive mountain only scalable by the BIG BOYS! Nothing is further from the truth. The smaller you’re the bigger the hit on your operating resources as a result of hidden, silent operating losses you routinely incur. It may not be obvious to most but they do add up in the end. Because each time some material, tool or spares are misused, damaged, lost or misplaced in the cost of work, money goes down the drain. But not many know so because the system simply does not recognize or capture those as losses.

Unrecorded, Insignificant Sundry Events

In the end, thousands of operating dollars are lost to unrecorded, insignificant sundry events because they involved neither injury nor product loss/damage. So long as these events occur in the heat of the day’s deadlines and production quotas, it’s ok. It’s part of the routine work that will get you to where you’re going. Some sort of collateral damage, if you will. After all, you can’t make an omelet without breaking an egg. Seriously though, is that all there is to it? I think not.

I think not because there’s a limit to all elasticity. No SME can withstand the weight of repeated of material loss, damage or misuse for too long before the strain begins to show. In fact, it is one of the reasons small businesses fail ever so often. Think about it. Each time you’ve to simply run to the storekeeper to sign for a replacement light bulb because the last one was accidentally broken as you were about fixing it in the lamp holder, you’re costing your outfit money. A cost not recorded as a dollar and cents loss.

Same goes for when a new abrasive wheel slips and breaks as you’re about mounting in place or when a flexible cord supplying a temporary lighting circuit has to be replaced same day because a forklift truck repeatedly drove over it on the aisle, damaging it beyond repairs. Not many are likely to tie the two unforced change outs to monetary loss, which in fact, they are. To most, it is the cost and consequence of doing normal business, nothing odd or extraordinary.

Extraordinary stuff

That may be true. However, what is extraordinary is the fact that these things happen regularly in the course of an 8 - or 12 - hour day or shift, without particular attention to what the monetary value in loss is to the business, until it dawns that it is hemorrhaging thousands of valuable dollars unnecessarily and in all directions. Because that’s what happens when a dangerously kinked and lacerated portable welding hose is replaced two days after initial installation due to poor handling and stowage, or when a lost packet of expensive copper screws has to be replaced for a client’s already delayed installation job to be completed. That’s what happens when a roll of sandpaper has to be condemned as unserviceable because it was left out in the open to rain, mud and grime or when a roll of thread tape is carelessly tossed into a greasy and grit filled container because of poor housekeeping routine or poor supervision.

Loss Control Is No Happenstance

Loss control is no happenstance. If there are no conscious systems, plans or methods to bring it about, it simply will not happen. And every cent counts too. There’s no point overlooking one thing and paying attention to another. The net must be fine enough to catch every slip.

The more organized and orderly the workplace, the less the number of loss-inducing events that are likely to occur. A clean and orderly workplace is a delight to the worker, and also most likely to be a more productive, safer workplace with little room for hidden, creeping losses because everything is likely to be where it should be. Errors will also to be fewer and far between, as it is unlikely that serviceable items will be lost in heaps of rubbish or trash.

You Can Stop the Hemorrhage
You can so easily stop hemorrhaging dollars and cents if you follow a simple routine of paying attention to what is going on around you in the workplace. Routine damage through careless or poor handling can be significantly reduced, and sundry losses can be drastically curtailed, saving you and the business a whole lot on your Opex. Remember that each time you run to the store room to pick up one more item of spare, tool or material which is lost or damaged in-situ, you’re throwing away money that could have taken you a little bit fu
Labels:

Comments

Post a Comment

Popular posts from this blog

THAT 5-MINUTE PEP TALK BEFORE THE JOB

There are pep talks and there are pep talks. Over the years, I've had the privilege of observing pep talks all day long on seismic crews, construction sites, production platforms, processing plants, wire line, drilling operations, rig moves and so on. But not once have I left not feeling maybe the crew could have done better with the shape and content of the core messages thereof. This is because I am of the view that safety messages are only helpful if they are clear and to the point, with little or no ambiguity, if any at all. Unfortunately, this is not always the case. Now 5-minutes is not a great deal of time for even the most gifted and skillful of speakers to nail  home  the key safety dos and don'ts of the job soon to commence. So most of these talks frequently average out to be sing songs and prayerful affairs in the end, with generalized 'messages' like be 'your brother's keeper', 'safety is everybody's business', 'you all know ...
Post a Comment
Read more

HOW MUCH DOES A NEAR MISS INCIDENT COST?

In 'ACCIDENT IS MONEY DOWN THE DRAIN', we tried illustrating  how a NOTHING HAPPENED near miss incident of a hammer accidentally slipping off a technician's grasp, falling through a considerable height and landing safely between two busy foremen, with no damage to property or injury to anyone on site resulted in so much useful production time loss. A conservative computation of the time-cost estimate showed what seemed to be a 'harmless' incident costing the site company management a hefty 3.4 Man-Days lost time in direct costs! The exercise ended without considering the 'POTENTIAL' of the occurrence. 'POTENTIAL' simply refers to the probability of a much more consequential outcome by chance or slightly altered circumstances given the number of people exposed to the threat at the time. This is usually what constitutes the difference between a 'NOTHING HAPPENED' incident, a disabling/ serious property damage one or a fatality . That th...
Post a Comment
Read more

How Much of Your Opex Do You Save Cutting Corners?

What % of your operating budget do you save when you look the other way while unauthorized changes and deviations are a norm in the workplace under your supervision? Would you 5, 10, 15 or maybe 30%? You are not too sure how much, if anything at all? Well, it is highly unlikely that you will ever save on your Opex if employees are free to make up their own rules as they go along or can decide which step on the job comes next instead of what the approved procedures say. In fact working with scant regards for the Right Way of doing things condemns you to an ever spiraling  operating budget spend. Because you'll find that you are constantly grappling with 'digging a hole to fill a hole' throughout the life of  the project. In the end, there are no prizes for guessing that your project will come in grossly over budget and way outside the delivery schedule because of all the issues of rework, unplanned stoppages, delayed logistics, repairs and replace...
Post a Comment
Read more