{"id":65,"date":"2009-11-24T04:38:00","date_gmt":"2009-11-24T04:38:00","guid":{"rendered":"http:\/\/sakanashiandassociates.com\/blog\/2009\/11\/24\/do-you-know-your-costs-of-operations\/"},"modified":"2009-11-24T04:38:00","modified_gmt":"2009-11-24T04:38:00","slug":"do-you-know-your-costs-of-operations","status":"publish","type":"post","link":"https:\/\/sakanashiandassociates.com\/blog\/2009\/11\/24\/do-you-know-your-costs-of-operations\/","title":{"rendered":"Do You Know Your Costs of Operations?"},"content":{"rendered":"<p><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">Inputs + Work = Output<\/span> <\/p>\n<p><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">If there is one part of a business that can silently kill, it is operations. Whether service or product based, if you do not know your operations process, you will not know your real costs of providing the products\/services your business offers.<\/span><\/p>\n<p><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">What logically follows is not not knowing if the business is making or loosing money.<\/span><\/p>\n<p><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">If you haven&#8217;t mapped your operations process lately, I would suggest that it be made a priority.<\/span><\/p>\n<p><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">Here is a simple exercise that may be helpful. <\/span><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">Take some inputs:<\/span><\/p>\n<ul>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">One\u00a0unopened package containing a loaf of bread &#8211; any kind will do<\/span><\/li>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">One\u00a0unopened jar of peanut butter &#8211; I prefer smooth<\/span><\/li>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">One\u00a0unopened jar of jam\u00a0&#8211;\u00a0strawberry is good<\/span><\/li>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">One knife<\/span><\/li>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">One tablespoon<\/span><\/li>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">One towel<\/span><\/li>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">One plate<\/span><\/li>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">One cutting board<\/span><\/li>\n<\/ul>\n<p><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">Output specifications<\/span><\/p>\n<ul>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">One peanut butter and jam sandwich<\/span><\/li>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">No end slices of bread<\/span><\/li>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">Sandwich to be served on a plate<\/span><\/li>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">Sandwich cut diagonally<\/span><\/li>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">Crust on sandwich okay &#8211; I like the crust attached<\/span><\/li>\n<li><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">Use one tablespoon of peanut butter and one tablespoon of jam<\/span><\/li>\n<\/ul>\n<p><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">Write down each step of the process to make the sandwich, without actually doing it.<\/span><\/p>\n<p><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">Now test your instructions and see how far you get before you have to stop the assembly process. Did you remember to take the lid off the jam, or remove the seal on the peanut butter?<\/span><\/p>\n<p><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">This exercise is meant to be fun, and demonstrate how much we take for granted. It is what we take for granted that can turn into unbilled hours, and unbilled hours are profit killers. When I was with the General Electric Company, I learned the value of knowing\u00a0the operations process and to be mindful of taking steps for granted.<\/span><\/p>\n<p><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">The obvious benefit to\u00a0a business by knowing their operations is profitability, another is the ability to jsutify your pricing. If you can not be competitive with operations that are in place, the business will not likely survive for long.<\/span><\/p>\n<p><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">You can base pricing on what the market is demanding, but if the product\/service can not be delivered profitability, why do it? Do you really understand your business operations?<\/span><\/p>\n<p><span style=\"font-family: \"Trebuchet MS\", sans-serif;\">Richard<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Inputs + Work = Output If there is one part of a business that can silently kill, it is operations. Whether service or product based, if you do not know your operations process, you will&#8230; <a href=\"https:\/\/sakanashiandassociates.com\/blog\/2009\/11\/24\/do-you-know-your-costs-of-operations\/\">Read More<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-65","post","type-post","status-publish","format-standard","hentry","category-operations"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/sakanashiandassociates.com\/blog\/wp-json\/wp\/v2\/posts\/65","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sakanashiandassociates.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sakanashiandassociates.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sakanashiandassociates.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/sakanashiandassociates.com\/blog\/wp-json\/wp\/v2\/comments?post=65"}],"version-history":[{"count":0,"href":"https:\/\/sakanashiandassociates.com\/blog\/wp-json\/wp\/v2\/posts\/65\/revisions"}],"wp:attachment":[{"href":"https:\/\/sakanashiandassociates.com\/blog\/wp-json\/wp\/v2\/media?parent=65"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sakanashiandassociates.com\/blog\/wp-json\/wp\/v2\/categories?post=65"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sakanashiandassociates.com\/blog\/wp-json\/wp\/v2\/tags?post=65"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}