I recently came across two distinct examples of corporate wastage that could have been prevented fairly easily.
Two companies leaving money on the table and not even adding any extra value by doing so.
Actually they are eroding perceived value AND wasting money. Two cardinal sins of business.
The thing is, the solutions are obvious.
Nesting Eggs
I opened up a big bubble wrap envelope today. Inside were four more bubble wrap envelopes.
Inside each bubble wrap envelope was a cardboard sleeve.
Inside each sleeve was a tiny label for a plaque (the plaque was actually sent separately). The cardboard sleeve had detailed instructions on how to peel the tape off the label and stick it on the plaque.
Seriously.
Costs:
- Extra (International) postage,
- Excessive quantity and size of bubble wrap envelopes,
- Customer perception of wastage, and
- Perceived lack of concern for the environment.
When a customer sees wastage they are reminded they ultimately paid for that wastage; even if you have contracted out distribution.
Someone always pays for wastage.
Boxing Paper Towels
I recently ordered some office supplies including six, 6 packs of paper towels.
6 medium sized boxes arrived.
I thought they had tripled the order.
I opened the first box and in it was a 6 pack of paper towels with the extra space filled with bubble wrap. Apparently paper towels are fragile.
The rest of the boxes were the same with the remaining small office items mixed in.
The guy making the delivery was shaking his head as well. He had to bring them all up to the office.
This is the 2nd time this has happened so it is not a freak occurrence.
I repacked one box with three 6-packs of paper towels and a little room left over for office supplies. I could have packed everything in 2 medium boxes and maybe one small box for the toner.
Costs:
- 3 extra medium boxes,
- Wasted bubble wrap,
- Space on the delivery truck and extra time to handle,
- Customer perception of wastage, and
- Perceived lack of concern for the environment.
So What is Really Broken?
In both cases these companies expended more resources than required delivering the same (or less) value to the customer. Perception was also damaged.
5 Questions to ask in customer fulfillment:
- Do the employees understand how their actions impact the bottom line of the company?
- Do the employees understand how what they do increases value to the customer?
- Have the employees received adequate training?
- Are the policies and processes driving the work or are they there to help the employees do better work?
- Do employees have the leeway to think and improve things so that points 1 & 2 are better delivered?
How are you setting up your business to maximize the value delivered to customers while minimizing costs? You can't ignore either as they drive the lifeblood of your business; profit.
