Hello spire2-ga,
This was a fun and interesting research project. I thought of two
examples immediately based on my own day-to-day experiences in the
past few years. When California was going through its most recent
energy crisis after deregulation there was a concerted move to reduce
energy consumption. Retail stores were required to use fewer indoor
lights and it was interesting to note what sections of the each store
were dim because every other light was turned off. Costco seemed to
compensate for this by installing skylights in some of its warehouse
stores.
http://articles.findarticles.com/p/articles/mi_m0FNP/is_4_40/ai_71560929
Calif. retailers urged to conserve ? state mandated restriction on
exterior lighting -
DSN Retailing Today, Feb 19, 2001
A few years ago California was going through several successive years
of drought and we were all urged to conserve water. One of the
recommended easy measures to reduce consumption was to put a brick in
the toilet tank with the idea that millions of households using a
little less water would make a big difference. Unfortunately, I
couldn?t find resources to give you the dollar savings involved in
these real-life examples. But my search turned up other cases to
illustrate your point.
The ?verifiable business facts? that I found fall into distinct
categories of product changes and process changes. The process changes
can further be divided into proactive and preventative categories. All
of the examples I?ve found show significant cost savings and some of
them can be considered ?huge.?
I trust that the examples of cost savings I?ve found will be
sufficiently graphic for your needs. Please don?t hesitate to ask for
clarification if any of this needs expansion.
Wishing you well for your project.
~ czh ~
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PRODUCT CHANGES
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http://www.industryweek.com/CurrentArticles/asp/articles.asp?ArticleId=1113
Co$t Vs Quality
Industry-wide, automotive manufacturers are notorious for cutting
corners on their products to save a buck. For example, many motorists
remember the days when all new cars came with a full-size spare tire.
Today, most new cars come with a skinnier, cheaper wheel and tire
combination that looks as if it belongs on a bicycle, not an
automobile. These "donut" spares typically come stamped with a warning
that they are not intended to be driven over 50 mph nor for more than
50 miles. By instituting this subtle change, auto manufacturers reaped
huge savings on tens of millions of vehicles, because the smaller
units cost less to make. Unfortunately, the switch -- of which buyers
were never informed -- resulted in reduced quality for the consumer.
***** The introduction of the small emergency spare tire was revolutionary.
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http://www.indstate.edu/recycle/9504.html
Summary
Since 1981, Federal Express has continuously reduced the thickness of
the paper-board used to manufacture the 9-1/2" x 12-1/2" FedEx Letter
envelope. Thus far, the weight of the envelope has been reduced 40%.
Combined with savings from the light weighting and redesign of other
paper, paperboard, and polyethylene shipping containers, Fed Express
has cut its costs $20 million a year.
***** With the enormous volume of envelopes used by FedEx it?s not
surprising that reducing the weight and cost of the paper used will
yield tremendous savings.
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http://www.ciwmb.ca.gov/Packaging/Events/SDPWorkshop/Facts.htm
Taking Packaging for Granted--Can You Afford To?
The James River Corporation, which manufactures tissues and paper
towel products, set up a team with its suppliers, shippers, a few
consultants, and a major retailer. For two years the team met to
identify and modify several products, along with packaging and
logistics. They found ways to cut costs and increase market share.
Some changes were relatively simple. The team reevaluated a box that
had not been looked at for 30 years. Cutting two inches off the flap
provided savings of $360,000 at one plant. Once again, the
manufacturer cut costs and increased sales, while benefiting the
environment.
***** This is a good example of how reducing the dimensions of
something as ubiquitous as packaging can reap big rewards because of
the volume of items involved.
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PROACTIVE PROCESS CHANGES
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http://www.s-t.com/daily/05-00/05-21-00/d03bu132.htm
http://food.oregonstate.edu/ref/pd/ref_ordonez.html
In search of faster fast food
The Wall Street Journal
Now that most of the best locations have been nabbed ? new restaurant
growth among the 100 largest chains slowed last year to its lowest
level in recent history ? drive-through may be the final battleground
for fast-food market share in the United States. It is "critical
because it's over half of our business," and is the part of McDonald's
"most susceptible to growing," says McDonald's Corp. Chief Executive
Jack Greenberg. For every six seconds saved at the drive-through, he
says, sales increase by 1 percent.
By some estimates, increasing drive-through efficiency by 10 percent
bolsters sales at the average fast-food restaurant by $54,000 per
year. Last year, the average fast-food restaurant did about $560,000
in sales.
Market-research firm Technomic Information Services confirms that
Wendy's takeout sales last year increased by 12%, vs 8.3% at
McDonald's and 3.1% at Burger King.
***** This articles gives some dramatic statistics about the extremely
competitive fast food industry. It explains how shaving even a few
seconds from a food preparation or delivery process can save thousands
for an individual restaurant and millions for the restaurant chain.
You said, "It would be nice to have something that would be desirable
to give to make the idea sink in." The I Love Lucy "Candy Factory"
episode comes to mind.
http://www.lucylibrary.com/Pages/ill-guide-2.html You could develop a
parody poster or skit to illustrate the fast food industry information
in the article.
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http://www.pizzamarketplace.com/research_13719_101.htm
Control food cost, reap profits, says Ostrander
"I saved 20 percent on my cheese costs in the first week, and went
from using 1,000 pounds a week to using 800 pounds," he said. Using
the cups, he added, allowed the pizza makers to "cheese a pie in 5
seconds."
Ostrander pointed out that "cupping" cheese is only one part of
controlling the cost of the most expensive item on an operation?s
pizzas. Pricing it wisely is a key factor, as is using diced cheese
instead of shredded for faster assembly.
***** This article gives a good example of the importance of portion
control in the restaurant and food industries. The savings are
substantial for the individual store and enormous for the chain.
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http://www.cowtime.com.au/technical/technical1.htm
CowTime Guidelines for Milk Harvesting
http://www.cowtime.com.au/media/qld/03_mar_19_big_savings.htm
Big savings from small milking changes
Dairy farmers can make big savings and improve their lifestyle by
adopting simple changes to their milking routine.
CowTime focuses on improving the efficiency of milk harvesting to help
farmers improve profitability and lifestyle.
Mr Gittins said milking costs ranged from 3.8 cents a litre to 8 cents.
Reducing the cost by just half a cent a litre nationally would save
producers a huge $50 million.
***** It seems that with some small procedural changes farmers can
improve their own performance and the cumulative national savings will
be huge.
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http://www.edcmag.com/CDA/ArticleInformation/features/BNP__Features__Item/0,4120,120781,00.html
Big Savings In A Small Package
Conserve energy and water, as well as space, when using a point-of-use
tankless water heater.
The energy it takes to heat water accounts for 20 percent of an
average household?s annual energy use. The cost to operate a
conventional gas or electric tank-type water heater is about $200 or
$450 a year, respectively. And about 10 percent to 20 percent of a
home?s water-heating cost is a result of standby heat losses ? when
heat from hot water stored in a tank is conducted and radiated out
from the tank. So says the U.S. Department of Energy?s Office of
Energy Efficiency and Renewable Energy.
Not only is energy wasted with storage tank water heaters, but water
is as well. Each year in the United States, more than 80 billion
gallons of water are wasted as people wait for hot water at the
faucet, says Kyle Murray, vice president of marketing for Controlled
Energy Corp.
***** This is another example of a product that?s somewhat useful for
cost savings on individual energy use but would make an enormous
difference for collective savings if the product was widely adopted.
Rethinking the process of heating water for personal use leads to the
development of more cost-effective products.
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http://www1.agric.gov.ab.ca/$department/newslett.nsf/all/agin147?OpenDocument
Farmers Can Save Big Money on Fuel
Effect of Changing Tire Pressure from Overinflated 20 psi to Correct
10 psi (J.D. 8760 Tractor with 20.8R42 Duals)
For a 640 acre field, this is a savings of $352 plus 2 hours and 20
minutes for one farm operation just by using correct tire inflation
pressures!
***** This example of properly inflating tires in an agricultural
setting can be transferred to wherever tires are used. The savings for
the individual may not be dramatic but the overall savings to all
users and the environment is very impressive and takes minimal effort.
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PREVENTATIVE PROCESS CHANGES
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http://www.cio.com/archive/041502/penny.html
Penny-pinching All Stars
Cargill's Taylor discovered that IT employees were calling 411 so
often that it was costing the department hundreds of thousands of
dollars in phone charges.
Taylor put a stop to the costly calls by blocking the 411 function in
the department's phone system. He then posted a link for nationwide
yellow pages on the corporate intranet. Without the calls to
information, Taylor saved about $250,000.
***** The simplicity of this example is elegant and dramatic.
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http://www.policyreview.org/summer95/thhood.html
Gains Through Innovation
Rosendin managers also found that a major cause of eye injuries was
that workers weren't wearing their safety glasses when they needed to.
Much of the company's work was done on high ladders, but safety
glasses were needed only some of the time. Workers ended up leaving
the glasses at the bottom of the ladder rather than balance them
precariously at the top, but then didn't bother to climb all the way
down to retrieve the glasses when their use was warranted. "Employees
needed something to keep their glasses around their necks when they
weren't wearing them," Johnson explains. A simple solution followed:
Each pair of glasses was equipped with a cord to go around a worker's
neck. That one seemingly minor action reduced eye injuries by 20
percent. Between October 1992 and October 1993, Rosendin workers' comp
claims decreased in frequency by 35 percent. The severity rate fell by
10 percent, and the company saved 27 percent in claims.
***** This is an excellent example of how a small change in procedures
that costs very little can lead to enormous savings by preventing
accidents that would cost a lot.
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http://www.restaurant.org/rusa/magArticle.cfm?ArticleID=497
Strengthen Your Safety Net: Kitchen Safety Is No Accident
Slips and falls, strains and sprains, cuts and lacerations, and burns
are the four leading categories of kitchen injuries.
Two years ago, Friendly's implemented a cost-sharing program to help
employees purchase slip-resistant safety shoes. The investment paid
off by reducing slip-and-fall injuries by 30 percent in its first
year. Company officials added the shoe program to its
accident-prevention arsenal after trying other methods to reduce
slip-and-fall injuries.
In 1995, the first full year of the program, cuts replaced slips and
falls as the number-one cause of injury and the company saved an
estimated $750,000. "The shoe program has definitely had an impact,
and our goal is to get every employee into a pair of slip-resistant
shoes," says Sarnie.
***** This is another very simple solution that led to significant
savings through avoidance of accidents.
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http://www.stopwaste.org/partnership/swss.html
Wa$te Prevention Success Stories
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SEARCH STRATEGY
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small changes big savings
changes saving millions
restaurant industry millions saved
"food industry" saved millions
innovation saving millions |
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