Have you ever tried to lose weight or slim down? Chances are, if you have, gaining control of eating habits and exercising were extremely tough, but the results benefited your health immediately and in the long term. The same can be said for slimming down business processes and gaining better control. Much like losing weight, this better control comes from knowledge—knowledge of what foods to eat, what exercises to do, how long a business task takes, how much of a raw material is used, etc.
An example of this slimming down can be exemplified by the Twice Baked Potato Company that my friends and I started. The production process involved three steps:
- Cooking off whole baked potatoes
- Scooping out the cooked potato (raw material)
- Mixing the cooked potato with cream cheese, butter, etc. that we would pipe back into the potato shell for a finished product
In the beginning, it was difficult to determine how many whole baked potatoes we would need to cook to get the right amount of raw material. Often times we would have to make guesses based on a count of whole potatoes. One can already see the issue with this … not all potatoes weigh the same or yield the same amount of cooked potato. This was costing us hundreds of dollars a batch as we would often have to throw out 20-plus pounds of excess cooked potato, or we would be short and have to go buy and cook more, resulting in many more hours spent working and paying employees.
As we paid closer attention to weights and yields and put tighter constraints on calculations for what we would need for raw material, we were able to see issues. For example, there was a loss in weight after the potatoes were cooked due to steam coming off of the potatoes. As the business evolved and more and more attention was given to variations and a deeper understanding of the process, we were able to develop a mathematical formula that would allow us to punch in the number of finished product we would need, which would in turn give us the amount of whole baked potatoes we would need to cook to achieve the correct amount of raw material. The result of this formula was that we would only have between a half and one pound of extra raw material each batch. This saved us hundreds of dollars a batch, and also saved time.
Could this same logic not be applied to larger companies? If we were able to gain better knowledge of our company and tighten constraints on calculations, then large companies can use this principle and expand it throughout. What saved us a few hundred dollars a batch, when magnified, could easily save manufacturing companies millions of dollars a year.
Could your company benefit from gaining more knowledge and slimming down?
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