NO business should be playing the game of doing it twice. The expense of fixing something doesn’t simply double the cost, it loses productivity that could have been used to make another proper product during the correction time.
As a simple example, let’s take typing a letter that costs 10 cents in paper and ink. If we do it again it costs 20 cents. But we’re business people so we have to add in electricity for the machine and lighting, space rental, insurance and machine wear. All doubled. Plus wages. The wages are not just the typist’s but also those minutes of the quality controller or manager who found the error and who had to check it twice.
The expense of mistakes doesn’t end there. We have to subtract from our profits the unknown factor of potential profit that could have been made during the correcting time if a second letter, which didn’t need correction, was being typed.
We should also add the time wasted in other areas of the business because of the delay, such as the mail clerk waiting. And if the letter misses that day’s mail we have to add another day before the potential of the new sales program can start to bring in profit.
I’ve given you a simple example to show the story. Physical objects are a little easier to see. Where attention really needs to be paid is to the intangibles such as a failed meeting, a messed-up delivery, an incorrect or unrealistic order from management, a report with missing or wrong information, a badly delivered PR conference, an over cautious (time wasting) negotiation on a lease, etc.
I am sure you could think of far better examples with greater extensions on where waste was occurring and where potential profit was not being made.
Thus I give you this eye opener as a full working exercise to do at your next staff meeting. Get everyone involved to find the areas of waste in different scenarios suited to your business and find where loss of time and money occur along with loss of potential profits.
When the numerous ways of producing waste in your business are all drawn up on the whiteboard there will be some shocked faces when everyone, including you, sees the true implications of errors in your business.
If it is done thoroughly, watch out at this point of the exercise. Some staff will think of giving up because it’s all too hard. Some will think it doesn’t matter because the business has travelled along okay in the past and profits don’t need to be so high. And some might give other reasonable explanations that make it all okay to have errors, which they say are a normal part of any business.
So you need to keep going with the exercise and move on to the positive view of what happens when there are fewer errors.
If you can get this far there will be a change. Your staff will become not just more aware of errors and the need to eliminate them, but will start proposing ways to prevent them. They will become to some degree more responsible for the whole operation.
If your staff isn’t interested then they need to be brought to understanding what pays their wage, keeps them employed and gives them security. They have to learn that they are the ones who have to earn their jobs.
Now, let’s get to the crux of the problem. It shouldn’t have happened in the first place.
However, no matter how good we want things to be we all know gremlins get in the works despite the best training, best intentions and best management techniques.
Is there an acceptable waste/correction level? Yes, but unfortunately most businesses set it way too high and call it ‘normal’ and don’t understand how some other business in the same industry can offer their clients a better deal, operate with smaller overheads, make more profits and somehow or another end up in front all the time. But it could all start changing for the better at a staff meeting.