I was talking with a company today who let’s say is “challenged.” They have some of the common problems that many companies have today – debt, cash flow, demand for resources and much more. A lot of those are not quick to resolve, but hearing them describe how they tackle a common issue of customer contact and service was. Their operations work against every opportunity in front of them.
A quick adding up of the costs that resulted from these legacy operations cobbled together to try to run their business indicated that it cost in terms of hard and soft dollars two to three times what it should to deliver dollars that the business should produce. Add to that the cost of lost opportunity while working inefficiently and there is a strong case for changes that will not cost a lot to implement but will have a near immediate bottom line impact.
The company sells services and related tangible products to a loosely closed customer community of members. This is a model that, with slight customization for industry and business genre, fits almost all companies that are not strictly retail, wholesale sales or producing tangible goods.
Yes, they like many companies have tried to make changes to remedy the problem but most of their focus has been on the actions and market rather than the gears that drive the business. You can try to grow your business through a variety of tactics but if you do not pay attention to the machinery of the business, the profit that should be driven by expansion is often consumed by internal costs. Operations are often one of the last areas to receive attention because it is often more of an irritation than a screaming issue.
Since there are so many interesting facets in this topic, our August 2011 series will be Operations and Opportunity to be posted Tuesdays, Wednesdays, and Thursdays through August. Watch for our posts beginning next, Tuesday August 2nd.
Some of the featured posts will include:
- Knock, Knock – Who’s Here?
- Say Cheese!
- The Handshake
- Show Me the Money
- Why Do We Do This?
- House of Antiquities
We look forward to hearing your comments, thoughts, perspective and questions.