It has been a tough year for business. There always seems to be some bad economic news looming over the horizon. In these trying times, one can only hope to pull things together and come out unscathed.
If you're a high ranged person in the company (CEO, business owner, senior leader, etc), you often find yourself wondering what steps should you take today that would preserve your asset tomorrow? How should you lower your current and future operating costs?
The post-pandemic world has undoubtedly shrouded your business acumen, but with the right steps, you can make your way back to the top. Here's how.
Standardise your business procedures
What is standardisation?
Standardising how things happen in your business can help you achieve efficiency. It sets up a uniform process called a standard operating procedure (SOP) for everyone to follow, which leads to more consistent results across the board.
For example, if you have a procurement department, it’s good to standardise the purchasing process and make it a rule to take at least three quotations from vendors before finalising any one of them. This way, even if your whole team gets replaced, the system stays intact.
Getting everyone on the same page can be a challenge, but standardising business procedures is an effective way to get there. Standardisation helps you focus your efforts toward solving problems in unison. But how exactly should you go about doing this?
You can start by taking note of where employees seem to lack clear directions for performing tasks. Take some time to closely observe the operations and identify areas that could be improved upon.
Next, outline exactly what needs to happen at each step so that everything stays on track without hiccups or delays. Who is responsible for which parts of the project? Be specific.
By clearly defining what should be done in all possible scenarios, your employees know exactly how to handle situations when things go south. They don't have to scramble for answers anymore because they already know the answer.
How does it help reduce a company's future operational costs?
Standardising business procedures is a great way to reduce unnecessary time spent on tasks. Employees know exactly what needs to be done and how, so there's no need for them to experiment or try out new ways of completing their work.
When employees focus on more important tasks instead of getting stuck on mundane ones, it saves time and money in the long run.
In addition, you gain operational flexibility. For example, when you standardise your company's supply chain management, you'll reduce customer wait times by ensuring faster delivery. How? You can change work centres more swiftly because you’re prepared beforehand.
Physical Asset Management
What is Physical Asset Management (PAM)?
Every company needs a management system to maintain its physical assets. This includes everything from property, plant and equipment (PPE), computers, office furniture – the list goes on.
PAM helps you get the most out of your assets before they expire. If you're not using the PAM system, there is no way of knowing when your assets might break down and fixing them could cost you a fortune.
How do you make your asset's value worth it? By having a more efficient way of managing them. PAM ensures this happens, with better coordination between departments to ensure that an asset works for as long as possible in its lifespan.
How does it help reduce a company's future operational cost?
Physical asset management keeps your assets running optimally and reduces unplanned downtime or repairs. The money you save on reduced maintenance and repair costs can be put towards other goals like growing your company's revenue stream.
When you have PAM, asset storage is centralised. This makes it easier to monitor your assets and cut down on leakages such as excessive transport costs or wear-and-tear damage.
Apart from that, PAM overcomes the limitations of traditional calendar-based maintenance models by preventing you from wasting money on unnecessary repairs.
Instead, it uses a need-based (not calendar-based) approach which will improve cost efficiency.
Introduce training programmes
What are training programmes?
Imagine losing a certain amount of money just because one of your employees forgot to check the oil in a transformer. Or if a warehouse manager forgot to check the expiry of a retail product's stock and all of it got wasted.
Training programmes help you avoid such costly mistakes. The best thing about these programmes is that they don't require any extra time from your employees; the training can be completed in their own free time and it's quite simple to implement as well.
Training is more than just teaching employees the ins and outs of their job duties. You want to help them discover how they can benefit from acquiring these skills, give them a better understanding of what's required of them for not only themselves but also your company so that everyone wins together.
Sure, you may need to invest in training material, one-on-one or group counselling sessions, practical training exercises, but once you understand the true cost of downtime, you’ll realise that training doesn’t even come close to such losses in monetary terms.
How do training programs help reduce a company's future operational costs?
Training your employees is a one-time investment that saves you money recurrently. This means if you train an employee once, they will be less likely to make mistakes. So, the chances of downtime or increased operational costs are reduced.
Also, training boosts employee morale. Employees are more invested in their job when they feel like the company cares about them. After training, employees tend to have fewer absences and show greater levels of productivity due to increased collaboration between different departments within a company.
For example, a miscommunication between the warehouse manager and the procurement manager can lead to confusion and transportation leakages. With team training, both departments will learn to work in tandem, and this will save your company’s money by reducing operating costs and leakages.
COVID-19 may have affected your business, but that doesn't mean you can't do anything about it. In fact, there's plenty you can do to secure your future cash flows and save on operating costs. The measures explained above are some of the ways you can get back on track and secure your business.
About the author:
Bryan Christiansen works on developing modern maintenance software. In his free time, he picks up his virtual pen to help maintenance and facility managers organise, automate and streamline their maintenance operations. Why? Dozens (maybe even hundreds) of hours spent talking with them and researching the field - while developing the software - should not go to waste!