Efficiency Management
How many people in your organization are responsible for its sales? How many are responsible for its expenses? Sales are concentrated; expenses are distributed. Which of us does not know the 80/20 rule whereby 80% of our business is concentrated in the hands of 20% of our customers? Sales people are visible. Odds are you were one of them. Now how about your purchasing? Does your centralized purchasing department even account for 80% of your procurement? Are top staff attracted to positions which control your spending? Are any of your large vendors your clients? Should they be? Expenses and spending tend to be invisible and are known by their cumulative effects more than their points of origin. Efficiency management is an antidote to expense proliferation.
Efficiency Management looks at the decision-making process in your company and seeks to create greater efficiencies. Sometimes the introduction of technology can improve accuracy and at other times changing the decision flow or eliminating steps will enhance productivity. For example, the centralization of purchasing into the hands of competent managers and the judicious use of outsourcing often increases efficiency on the order of 5% or more per year.
Efficiency management is however a much broader application than purchasing. We have successfully applied our methods to: logistics, travel, and manufacturing amongst other categories.
