3 Ways to Cut Your Transportation Costs

3 Ways to Cut Your Transportation Costs

“It is not the strongest or most intelligent who will survive but those who can best manage change.” – Charles Darwin

Alberta is in an unprecedented economic time. The impact of the COVID-19 crisis on the energy and other sectors is already rippling out, and individual businesses are facing a perfect storm of money-sucking problems.

We talk a lot about how to cut the deadly wastes to save money. Over the next couple of months, we’re re-doing our “Deadly Waste” articles, only we’re taking it up a few notches in order to be your partner in adapting to this storm.

The cost-saving ideas in these articles may be uncomfortable, but growing pains can hurt even when we know it’s for the best. We hope this helps.

Transportation costs can creep up in the shadows. We often don’t factor all of them in, and we rarely use these expenses in our negotiations even though third party transportation costs can be quite flexible. 

It’s time to zero in on all the costs we can cut back, comfortable or not. 

 

Your Vehicles 

Company vehicles are crucial to daily business, but it’s not business-as-usual right now. Whether you have 1 or 100 vehicles, it’s time to consider what role they’ll play in the challenging times ahead.

Your first instinct may be to sell them, and as a last resort you could. But vehicles are terrible investments and, especially in a climate like this, you won’t get much for them. You’ll also need to spend a lot more to replace them once things pick back up, and they will. Hold onto your wheels if you can.

We often forget about insurance, but it’s expensive overhead. Make a projection for how much you’ll need for your fleet and cancel insurance accordingly.

It sounds counter-intuitive, but keep investing in daily maintenance. This is not the time to have to haul company vehicles into the shop for expensive fixes. 

Also, check periodically on any vehicles you’ve pulled insurance from and parked. Run them weekly and perform general maintenance (making sure they’re on your property, of course). 

Yes, gas is cheaper. But for most businesses that cost savings will be insignificant, and typically not something we want to be reminded of.

 

Your Vendors

When you hurt, your vendors hurt. They will also understand that revenue and margins are not what they used to be.

Transport costs are a favourite bargaining chip. Buy more, and freight goes down. Buy more than that and it’s free. It’s time to negotiate with your vendors on this. Be respectful but also frank about your reality. Many vendors will bring those rates down.

If you’ve gotten better deals by taking larger shipments from farther away, negotiate that. Most importers have warehouses, and most warehouses are fuller than they should be because of economic pain. Do what you can to leverage our new reality.

 

Car Allowances 

Senior management often enjoy this as a perk, essentially being reimbursed for kilometres travelled for work. Clicks are tallied to and from businesses lunches, client visits, etc.

But lunches and client visits aren’t happening now. And those managers may be working from home. So do those allowances really make sense?  Are they, in fact, justifiable if there are negligible kilometres travelled. 

You will, of course, get push back on this. But these cuts aren’t meant to be comfortable; they’re meant to help you adapt and stay alive. 

The “adapt and survive” mantra may frame business over the next year or more in Alberta. We’re here to help you get ruthless with your waste: it’s the best way that we know to keep your lights on in times like these. 

You’re Wasting Money By Doing Too Much

You’re Wasting Money By Doing Too Much

Alberta is in an unprecedented economic time. The impact of the COVID-19 crisis on the energy and other sectors is already rippling out, and individual businesses are facing a perfect storm of money-sucking problems.

But we’re also Albertans. We adapt, and we survive. In 2020, we will adapt faster than we ever have before—we have no other option.

We talk a lot about how to cut the deadly wastes to save money. Over the next couple of months, we’re re-doing our “Deadly Waste” articles, only we’re taking it up a few notches in order to be your partner in adapting to this storm.

The cost-saving ideas in these articles may be uncomfortable, but growing pains can hurt even when we know it’s for the best. We hope this helps.

Overprocessing happens when you expend more labour producing a product than you’ll recoup when you make the sale. It can be accidental or deliberate, but it’s all waste. 

It can also become so baked into your processes that you can’t see it anymore. But in times like these, we have to learn how to see it. 

 

Re-Evaluate

We can’t adapt to a situation if we don’t understand it. If you’ve delegated so much away that you’ve lost touch with the details of what you’re delivering, it’s time to dig back in.

If you’re overprocessing, you usually have the option of raising pricing or trimming the product. In an economy on the edge, raising prices is not a good idea. Meet with your team and get back in touch with every detail of your products. What are you delivering that’s essential? And what are you delivering that you can cut out?

 

Get Involved

Good people want to produce good results. You want a team that cares personally about delivering the best that they can for your customers. 

That also creates tension. They care about the product first, and the economics second. As the boss, you’re probably the opposite. If you leave your team unchecked, overprocessing will creep up. It means your team is doing their job over and above, but for survival’s sake, you need to intervene.

Have a talk with all of them about economic realities. Be honest and frank—human to human. Cut the passive voice and corporate BS. They’re as worried as you are, and they need a leader who can lay down clear expectations.

 

Standardize

The economic situation isn’t improving in a few months. Whatever changes you make to your deliverables need to endure. You’ve spent
the time deep-diving, now it’s time to move on and let your team execute.

Make sure you document the new, slimmed-down process. You want a codified way to keep the pieces you have cut out, out (and make sure your team understands that this is actually a compliment to them!).

Then, go onto the next deliverable, one at a time, starting with the most common. Don’t take shortcuts; take the time you need to review, cut, and document before moving on. This way you can feel comfortable with your pace, knowing you don’t have to look over your shoulder.

How to Keep Your Customers During an Outbreak

How to Keep Your Customers During an Outbreak

People are scared right now. And whether you think what we’re facing is a dangerous situation or overblown by the media, your customers are getting more worried about the Coronavirus every minute. Right now, that’s what matters to your business. 

So how do you keep them coming in? Or, if they don’t want to walk through your doors, how do you keep their business? Here are your action items for keeping customers during an outbreak:

 

Low-Hanging Fruit 

When people are scared, they stay indoors. Of course, this is going to impact your foot traffic. 

The low-hanging fruit is to be as safe as possible.

If you have plush chairs in the waiting room, replace them with plastic or steel. If you supply toys for kids in your waiting area, opt for books with laminated pages (and let your customers see you disinfecting them regularly). 

Major events, which mean lots of people in a small space, may see slumps in attendance. With virus fears in the back of their minds, people will change their habits and shun large crowds. Now might be a good time to cut your losses and postpone events that rely on a big crowd to turn a profit.

 

Go Remote

Do you have options that don’t require your customers to come into your business? This is an area where you can give your customers peace of mind AND potentially save some money as well.

If you’re in retail, why not offer to run pre-purchased products to your customers’ cars, so they don’t have to come inside? If you can provide home delivery, even better. A portion of your customers will start to avoid public areas whenever possible, and unless you’re selling essential goods, that will probably include you.

If you operate in a professional services office, do your customers have to come in as often as they do? Do they need to sit in that waiting area where everyone sits and coughs and hangs out in those comfy plush chairs, just so they can shake your hand?  

Consider offering more services via video conferencing. There are times that you need face-to-face, but everything from presentations to signing documents is now easy to do remotely. It’s more convenient for your customers, and it allows you to be more flexible with your time.

 

Supply Chain Issues 

If you rely heavily on a China-based supply chain, Coronavirus is likely to affect you the most. Since the SARS outbreak in 2003, we’ve become far more reliant on Chinese goods.

Peaking in mid-March and expected to last a while, the interruption in imports will affect broad swaths of the economy, from manufacturing to luxury goods. If you have local sources that you can investigate, now is the time to make some calls. 

Some companies, like Apple, have a reserve of raw materials built up for such an issue, so it will be a few months before the average consumer starts to feel the pinch. How long the pinch lasts depends, of course, on how fast and far the virus spreads and its impact on the supply chain.

This is the time to protect your livelihood the same way you protect your own health. Look for any possible area where the virus can find its way into your books, and find solutions now—before your business starts showing symptoms.

Protecting your Business During an Outbreak

Protecting your Business During an Outbreak

Coronavirus coverage is everywhere. And whether you think it’s pandemic or paranoia, here’s the reality: if an outbreak happens in Edmonton, people are going to be scared, and some are going to get sick. 

The government’s job is to protect the people, and your job as a boss is to protect your business. What steps can you take to keep your business running during an outbreak? 

It turns out that a lot of the things you can do to protect your business are pretty similar to the Lean improvements that would save you money anyway!

 

Start Simple

Your team, and the energy and experience they bring every day, is the most valuable part of your business. Sick days are expensive, and with a scary new virus looming, the nightmare scenario—a large percentage of your workforce getting infected—threatens to grind your business to a halt. 

Employee health is a good investment. There’s a lot of low hanging fruit:

Be Flexible

If someone has a cough or a sore throat, they need to stay home. However, you have an impact on that decision. If they feel like they’ll be left out, fall behind, or betray an unwritten, “suck it up” code, they will come in anyway.

It’s up to you to create a culture where someone’s decision to stay home won’t be seen as a mark against them later. How you react to people staying home (and whether you stay home when you’re sick) sends a message, and the message you want to send is that staying out of the office keeps everyone else safe: it’s neither weak nor lazy. 

You can also make it easier for people to stay home, whether they’re sick or not. If you haven’t started exploring the merits of allowing some members of your team to do some work from home, now is the time. 

 

Remote Work

If there’s an outbreak, there’s a good chance that even healthy employees won’t be able to come into the office. There may be advisories against leaving the house, schools or daycares could be shut down, and childcare could become unavailable.

Remote work also keeps that employee at home, in the most contained and controlled environment that’s available to them. As long as they’re productive, keep them there. You may be surprised by how much your team can get done while working from the safety of their home computer.

      

Travel and Meetings 

The “smile and a shoeshine” tradition dictates that the more you travel, the better business you do. In an outbreak situation, airports become hotspots for transmitting disease meaning the less travel your team does, the less they’re gambling with infection. 

This is also where you can save a lot of money. Sometimes, like if you’re closing a big deal, travel matters. But more often, it doesn’t, and it’s a grandfathered-in perk for ourselves or senior staff. 

Cut back on travel. Your staff and your clients will understand. 

 

Processes 

If only one or two team members know how to fulfill a necessary process, you’re in trouble if they get sick. Now is the time to document your most vital processes to build a resource of skill sets within your business. It could be as simple as asking the one person who knows where the bank deposit key is to send you an email with its whereabouts.

Check out our blog on why processes matter for more on documenting processes. 

Disease outbreaks are more common than we think, but when a frightening new virus threatens to close in, it’s always best to act proactively to protect your people—and your bottom line. Lead with transparency, flexibility, and an emphasis on hygiene. As coronavirus runs its course, your business can get through these uncertain times with an excellent prognosis.

 

The Surprising Ways that Processes Matter

The Surprising Ways that Processes Matter

Businesses waste a lot of money, but not in the places that you think. Most of the money we waste is invisible. It’s baked into the tiny inefficiencies that we repeat ten or a hundred times a day. And it adds up.  

Here are the top 4 reasons why you need to bracket some time soon to document your most common processes. It’s not just money you’ll be saving.

 

1. Focus 

We fulfill hundreds of processes daily. On the simple side, we make coffee, get the mail, and send invoices. On the complex side, we generate reports and organize events. 

Think of a process that you often repeat in your business. Now think about how that process started. I’ll bet my bottom dollar that it wasn’t planned: it just began. And even though it takes up a good percentage of someone’s time, chances are that no one really thought about whether there’s a better way to do it. 

As soon as we focus on a process, we start to expose waste. We ask the questions we never have before, about what parts are redundant, outdated, unnecessary or don’t add any value. 

But the level of focus that you need doesn’t come from a casual across-the-desk chat. It comes from getting around the whiteboard, turning off the phones, and zeroing in.

Start simple. Bag a win to build confidence for you and your team before moving to the complex processes. Choose 2-3 that you do most often and get ready to map them out.

 

2. Empowerment 

The boss cannot ordain, delegate, or order Continuous Improvement to happen. It comes from empowering the troops day in and day out; that’s why it’s more of a cultural than a procedural change.

To zero in on a process, pull all the stakeholders involved with that process into the room. Everyone who touches it has a say. 

You can get into the actual process mapping symbols if you want, but don’t let it overwhelm you. All you need is your team, with a unified sense of focus. 

Write down every step of the process, no matter how small, in sequential order. Put the name (or position) responsible for each step as you go. Don’t rush this. If it takes two hours for one process, then play it out.

Once every step is staring you in the face, ask the team how to save money by making it more efficient. At that moment, they will know that their feedback matters.

 

3. Streamlining 

Every one of these inefficiencies is a waste-mosquito sucking a tiny bit of money off your bottom line. And, it all adds up fast. 

From here, your team will have a fire under them. Use this momentum to ensure that the rest of the meeting is about reworking your new, efficient processes and blending them into your daily habits.  

 

4. Training

It costs a lot to train someone. Hopefully, they have many of the raw skills you need on day one, but the investment comes in shaping their habits and those of your business culture. 

Documented processes are a shortcut to training. When your new employee starts, these documented processes make it easy to give them the materials that will tell them step by step how to dive into your business’s most common workflows. 

Eliminating waste isn’t about cutting corners: it’s about finding value. Unite your team toward finding the little things that leak time and money every day, and everyone wins.