4 Tips To Lean Overhead : The Gateway To Your Competitive Edges


Maximal gain is definitive of business efficiency. Faced with soaring competition in ever changing markets, retailers are compelled to look for ways to improve legacy operations. Cost-effective – lean – overhead being the most overlooked key success factor in retail, four easy tips are at bay to turn inefficiencies into competitive edges.


1. Inventory Security

No business fulfills its potential without operational efficiency. For retail, that means optimized inventory security. No matter how well designed, seemingly an amount of waste is bound to incur with no possible way to prevent while human error and theft is nearly impossible to handle beyond controlled parameters. Damage and loss by duly authorized agents can be managed with reinforced packaging as well as suitable packing and storage according to the type of good. To handle theft and damage from unauthorized agents, on the other hand, external factors must be controlled with preventive measures that guard access to the premises. Thus, inventory security systems can be deployed with monitoring cameras and access key cards to control entrance in classified areas, accordingly.

The loss and damage of customer goods are beyond repair. It only has to happen once to cause a turnover. Happen twice, aftermath extends beyond the value of goods through words of mouth about the company’s unprofessional handling. Hard earned reputation over decades can be tarnished overnight. The cost is compensation plus the customer’s confidence, trust and lost prospects. A key advantage from having a viable security system is thus the track-ability of responsible agents and crosscheck validations through CCTV cameras to assure the safety and security of goods – and particularly ones of high value.


2. Labor Cost Reduction

Operating budget is contingent on labor cost. As such, decisions need to be made in undesirable conditions to either issue pink slips or boost productivity, the former being a last resort that weighs heavily on job satisfaction, team spirit, productivity and overall efficiency, which in turn diminishes operational effectiveness, altogether.

To the contrary, work incentive is almost always the better alternative to boost workplace productivity and effectiveness. It can be done through appropriate job allocation to prevent idle time while making sure that employees are not bogged down by excessive workloads that also affect job satisfaction.

Two pointers to reduce labor cost:

  1. Training: hiring new employees, experienced or not, involves learning, adjusting and training, all of which takes time. As time is money, a priority should be given to training the workforce, while the same time, ensuring diverse abilities across the team. Equally important is the ability to work well with other teams, internal sections, external units or self-learning of additional knowledge and experience through external training or sources and sharing back with the team, i.e., professional mindsets that require training, as well.
  2. Technology and Standard Operating Procedures (SOPs): the application of technology and available apps to automate simple-redundant work processes allows employees to commit invaluable time to other responsibilities that require complex troubleshooting and coordinated resolutions. With appropriate technology in place, both redundant and complex processes are better carried out with SOPs in an interactive manner to simplify best practices into basic 1 2 3 steps for team members to get on the same page and implement. Doing so can increase value to the organization, not only through streamlined procedures that cater maximal efficiency and effectiveness, but through innovations and new found projects, as well. As opportunity often falls next to discovered obstacles, SOPs is the best way to simplify and distinguish routine procedures from new, uncharted territories.

3. Proper Selection of Tools and Equipment

It’s as much about wisdom as it is about technique. The same as technology, nothing facilitates technique better than the tools and equipment that define the infrastructure. Tools and equipment on an facility scale, nonetheless, spells intensive investment. Here are two pointers to keep a lid on expenditures without tipping the balance sheet tightrope.

  1. Opt for multi-functional multi-purpose tools and equipment rather than single-function devices.
  2. Regular maintenance and proper operating procedures are a simpler and more cost-effective measure than repairs following a breakdown or damage that costs an arm and a leg. Beyond wasted time, idled operations and disrupted workflow causes delays that automatically come with opportunity costs and lost revenue. Thus, maintenance as a standard operating procedures is strongly recommended.

Furthermore, keeping a log of regularly employed devices and those used occasionally or underused can channel the budget to things that are really needed in terms of practical purposes and core competencies. Investment in unnecessary, high maintenance apparatuses, on the other hand, can blow everything out of proportion and break the balance sheet, altogether.


4. Environmental Awareness

Environmental awareness has now become a must for all organizations to show that it is aware of the footprints on its behalf and is committed to the best green practices that it can feasibly manage, thus the positive corporate image. Green practices also benefits the organization from saved expenses realized through energy conservation, i.e., first and foremostly by means of a clean-cleaner energy transport fleet. Other areas of potential lie in facility management, e.g., embedded infrastructure technological applications and SOPs that streamline best practices, thus maximum asset utilization, along with installed heat insulation sheets to prevent air conditioners from being overworked and windows that naturally enhances light entry and illumination in lieu of light bulbs, along with water-saving faucets and many other measures.

In terms of transport mode selection, minimized air transport not only saves significant costs but also curbs considerable amounts of greenhouse gas emissions, as well.

In a time of slow economic growth and rising costs, the Lean and Go Green concept is definitive to keeping the balance sheet afloat with new found competitive edges and sustainable success, i.e., success for everyone down the road without leaving the ecosystem that nourishes life in ruins.


Compiled by BLOG.SCGLogistics

References and credits: cerasis.com, freepik.com


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