Best kept secret to lowering expenses

This isn’t what I intended to post today. My scanner finally came so I was going to use that to put together a post but it’s nearly three and the scanner is still in the box. Then I got sidetracked with Bill Waddell who is back to blogging at Evolving Excellence. You think I’m bad, I’d never have the nerve to write like he does. Today he said something that gave me an idea:

I always ask top management to list the most significant innovations they have made, or are working towards. They [want] engineers to dream up a product technology that, in one fell swoop, reinvents the product, redefines the market, propels them years ahead of the competition. And they are looking for their lean initiative to instantly make their workers into production machines that are defect free, laboring at half the price, and never wasting a cent of support costs. In short, their view of innovation is for the value creating end of the business to perform miracles.

I say much the same in my book ad nauseum but here from pg.202:

Production costs vary depending on the production schedule so larger chunk expenditures deserve more attention and investment… This is the reason why the biggest reason for cost over runs is over focusing on the final phase of production which is where they have the least amount of control.

Everyone focuses on reducing costs of things for which we write the biggest checks, but what if we focused on the smallest costs first? What would happen then? I realize it seems counter intuitive to worry about tiny amounts with looming overhead but think about it. I tried to think of one such example I’d done and two things struck me,

  1. The small cost items saved me a lot more money than I ever imagined.
  2. The reason I made those changes wasn’t money, it was annoyance.

Then I realized that the most cost effective changes I make are based on reducing my annoyance, not expenses. This applies to patterns, sewing, everything. As a rational person, it makes more sense to focus on larger costs because dollar-wise, you can’t justify wasting energy on something low cost -or is that really rational? I say it’s time to use annoyance as a productivity and cost cutting tool.

An example:
I used to trot down to the post office every afternoon after 5 PM (ours closes at 6) and wait in line to process the packages for mailing. I didn’t mind it because it was the only time I saw people during the work day so you visit a little and look at people and all that. But one clerk (Julio, now retired) could only move one body part at a time so if his lips were moving -that’s technically two body parts- it taxed his physiology to the extent he was unable to move his hands. Worse, he fancied himself Mr Popularity and if he saw a child, that put the brakes on everything. He’d stop working, lean halfway over the counter and call the child over (which usually took time because the kid didn’t realize the weird man wanted him to come), give it a piece of candy and visit with the mom. It got to be so bad I took to timing him and gave him a status report when he was done in terms of how many minutes per package. His average was over two minutes per package. If you’re mailing ten items as I usually was, that’s over 20 minutes at the window to say nothing of how long it took to get there.

One day I’d had it, I asked him as a favor to do it (relatively) quickly. I was tired, it was the end of the day, I had to go home and cook dinner and be in a rotten mood for my family. I’d looked into internet mailing software but it seemed too costly when my time was free (admit it, we all do that) and I’d have to learn something new and what if I didn’t like it or it was a hassle? I ended up getting Endicia and it has saved me so much money, time and my prime motivator -annoyance. I pay $15 a month and the cost of larger labels ($20 for 200). It saves me money because I send everything delivery confirmation and you pay slightly lower rates on some things (5%). With Endicia, I get delivery confirmation half price or less which amounts to saving over $60 a month even after paying the monthly subscription. Best of all, I don’t have to wait in line. If your packages are ready to go, you can go right up to the counter and drop them off. The only downside is the ugly looks you get from other customers when you go to the front of the line. In the end, solving this low cost problem dramatically improved my productivity and reduced my frustration. There were other costs I eliminated that I hadn’t factored in. Such as the time it took to fill out the delivery confirmation slips and entering those into the computer.

So that’s my challenge for you. Instead of figuring out ways to cut costs on big ticket expenditures, find the lowest cost annoyance you have and fix it. That it annoys you is the big tip off; make a list of those. And do it over and over even if it’s something silly like moving a box you have to walk around all the time like I do. The results may surprise you. Some of you are a lot smarter than me and may have already figured this out. What sort of changes have you made?

PS. If you sign up for Endicia and reference my account number (607054), I get a free month of service. You get a free month even if you don’t.

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12 comments

  1. Lisa B. in Portland says:

    OMG, this is why I need to have a bigger house! No, really! Then my DH can keep all his computer parts and cords and such AWAY from ME. Then all the games and toys can be on their shelves and not taking up a whole bookshelf, under the kids’ bunkbed, and half the couch. Then I can take the laundry basket to and from the washer and dryer w/o having to carry it sideways. Then I can have all my fabric in the sewing room and stop forgetting what I have. It all totally is “even if it’s something silly like moving a box you have to walk around all the time…”, it really is. :-)

  2. dosfashionistas says:

    I have frequent mailing and the mail carrier picks up my packages. I put a request for pickup on the PO web site and the next day he picks them up on the front porch. And he leaves me those nice plastic bins to put my packages in too. Of course I don’t get out of the house and the only person I get to gossip with is the carrier.

    On the subject of things that must be walked around……….I cannot say a word. Other houses have spaces, we have paths. The grandchildren think the stock fabric makes a great obstacle course. S.

  3. Emily says:

    Oh I love trying to figure these types of things out. Right now, as I finish up my certificate program, I’m working part time as a bookkeeper/office admin in a small architecture firm and it’s my job to find ways to cut little corners like this. I think it’s kind of fun to develop little systems that save time and money and keep things organized and flowing. I find making spreadsheets work for you (instead of the other way around) is one of the best ways to save time (and hence, money). For example, at the end of every month, it used to take me up to 3 days to create all the invoices for our clients (and I realize that there are software out there that can do it automatically but my boss has his own “design” for the invoice that prohibits me from using a rational method) and I’ve set it all up in excel so that now it only takes me 4 hours. The rest of the time I can now spend lurking on blogs! :)

  4. Sandra B says:

    This reminds me of the Pareto Principle, which claims that 80% of the results come from 20% of the effort, ie 80% of our time is not giving us that much value. It seems to work in so many ways, 20% of our clothes are worn 80% of the time, 80% of our time is spent with 20% of our aquaintances, 20% of our clients bring in 80% of our income, my kids play with 20% of their toys 80% of the time (I keep trying to throw out the 80%, thereby changing the balance. I figure that 3 or 4 iterations should get us to one toy each and a tidy house)

  5. Lisa B. in Portland says:

    LisaB, but then I wouldn’t have clutter, the kids would have their own rooms, I’d have a back yard deeper than 7 feet, and could have a sewing studio (which equals room for industrial machines).

  6. kathleen says:

    how is endicia better than using the post office website to buy and print postage?

    It’s probably not worth getting endicia unless you’re mailing at least 30 mail pieces a month with delivery confirmation; that being the break even point on the subscription. Otherwise, endicia is preferable for a couple of reasons. The first is waste and annoyance. If you print a priority mail label from usps.com, it wastes an entire page, for me, that’s two labels. That’s annoying and wasteful. The other thing is you don’t have all of your customer’s info (date of mailing, cost, contact info, address) in a database. On the USPS site, it’s a one shot deal. Type the info in and you have to keep track of a piece of paper with all that stuff on it. Then later on, if you have a problem with delivery, you have to either page through all your manual printed out receipts and then type it in at usps to see what happened to it. Endicia saves a lot of duplication of effort. In endicia, you just search under the person’s name (whatever field) to find the record. You can also export all those shipping records for use later.

    Either way, endicia or usps.com, you don’t have to wait in line at the post office for service.

  7. Actually, there’s another shipping option, USPS Shipping Assistant, a software program from USPS that is run from your machine. Discount on the DC’s, you can buy postage or use stamps, keeps the addresses and records for you, and lets you order the free pickup online (if you need it.) The only thing I haven’t solved yet is the label size problem, but I admit I haven’t worked very hard to research it and the program is WAY better now than it used to be. And yes, I started using SA due to the annoyance factor (annoyance at the USPS and at Endicia and stamps.com. lol)

  8. I use the USPS online. You CAN use a 1/2 page to print your label. Speaking of labels, I NEVER use labels, just regular copy paper and take it to the box. The only thing I do is put a piece of clear tape 1/2 way over the bar code (this tip was given to me by my local carrier–all you need is the barcode to get it to it’s destination).

  9. Marie-Christine says:

    Thank you again Kathleen for kicking off thoughts as you so often do. I totally agree that resolving minor but frequent annoyances is a huge plus, worth any price but usually totally worthwhile in gained productivity. In fact, I was extremely happy when I figured out way back when that you can (for free) just register directly on the PO website, and use it to quickly crank out pre-paid labels that let you zip to the front of the PO line and drop (we had a raving maniac, everyone was mind-bendingly slow, it was a daily horror).

    After this article mulled through a bit, I had a very productive re-arranging of my home laundry facilities last week. Granted, the trip to Ikea was the usual bear and wasted an entire exhausting Saturday afternoon. But my simultaneous washing and drying capacity doubled for a mere E12.95! Yeah! I can even be more weather-independent. Just between us, I’d rather be sewing than doing housework..

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