52 Opportunities

The two components of direct labor costs

Hours worked are driven by how many people you need to run a process to achieve some volume output. So there are two distinct analytical questions; how do you staff the process, and how well does the process run?

The conflicting objectives of materials management

Material costs can make up a significant part of a product's cost structure, often many times more than labor costs, so it's a good profit driver to focus on to find opportunities.

The process of generating revenue

Cost reduction is generally perceived as fairly negative whereas revenue improvement is almost always positive. But many improvement projects focus on cost, rather than revenue. Why is that?

The ten key profit drivers

When we look at organizations to assess opportunity, we focus on ten key profit drivers.

Are suggestion boxes useful?

Suggestion boxes are one of those seemingly good ideas that can easily backfire. When we are studying a process area we create a big wall map which is a visual presentation of how the process works. It makes it easy for employees to see how and where their part of the process fits into the whole.

Managing vertical functions in a horizontal process

Due to the functional nature of most organizations, workload can become quite easily unbalanced when you look at it from the perspective of a horizontal process.

In search of world-class performance

World-class, or best-in-class, are terms that organizations like to use to either describe themselves or to use as ...

Too bright to see opportunity

It takes quite a lot of humility to find opportunity and sometimes being smart simply makes it that much harder.

Don’t draw your findings from your conclusions

In the last Opportunity we discussed the value of being a contrarian, so it seems only appropriate that now we'll ...

The unlikable tendencies of a consultant

Contrarians have an innate desire to be skeptical, take opposing viewpoints, and want to do things differently. Although it can be slightly irritating for others in a social setting, it's very helpful when you are looking for opportunities in a business.

The good and the bad of overtime

Whenever we see overtime over 5% an analytical red flag goes up and we start to suspect that there may be too much cost built into the process. Many organizations use overtime to offset peak volume periods.

The real value of “5S”

5S is a Japanese workplace organization methodology that is typically part of most "lean" programs. There are a few variations of how to translate the original five Japanese words.

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