April 2010

Successfully implementing a waste (cost) cutting program

by Dave Grubb in WoodIQ.com April 2010

Few companies today can successfully introduce a waste reduction program, which relies on the input and involvement of their employees, without the aid of a great marketing plan. In many companies, cost cutting is management talk for labor reduction and few employees are willing to line up in support of more of what they have been seeing.

The first part of the marketing plan should be to talk about waste reduction and not cost cutting. Certainly few that read this have not been on an aggressive cost reduction program in the current markets, but that does not mean there are not remaining opportunities; especially if you effectively enlist your employees.

Any plan that involves your employees is best sold on the value it represents to them. The value has to be well thought out and clearly articulated from the outset. Effective waste reduction programs will result in improved profits, which in turn can be reinvested into the company to fuel growth. That is easily understandable and interpreted by your employees as holding value for them. Companies that have the trust of their employees will find this will not be a difficult sale.

The second element of a good marketing plan is to reward both participation and the most valuable suggestion(s). These need not be overly expensive, a participation reward might be a company logo shirt, and the winning prize(s) a few hundred dollars.

Keep the program short, a few months is far more productive than open ended, and a defined ending date promotes elements of urgency and commitment.

Establish a review committee to evaluate suggestions. Make the submission process as simple and user friendly as possible. Use your own Intranet if available. Maintain a visible log to show the status of each suggestion.

First roll out this program in a pilot form to your senior people. If they don’t buy in and get involved, you need to understand why and make the necessary changes before introducing it company-wide.

The review and approval process must be uncomplicated, transparent and the findings of the review committee clearly communicated to the participants. Timely implementation of approved suggestions is important to demonstrate the company’s commitment.

Suggestions that are not approved should be returned to the submitter with a full explanation of why their suggestion was not accepted. This explanation will go a long way in helping the employee do their own future evaluations of their thoughts and to better understand the process of waste reduction.

The review committee needs to be capable of not only accurately evaluating suggestions, but also building on the suggestions to maximize the return.

Don’t expect a box full of “home runs” — that simply is not going to happen — but do expect some pleasant surprises and celebrate them when they happen. This needs to be a “public” process — and the successes need to be appropriately publicized.

The most valuable and lasting aspect that can come out of a properly managed waste reduction program is that your employees will be far better equipped to identify the waste that exists in every organization.

Keep in mind that one form of waste is inaction; waiting while opportunities are missed. These are unforgiving times; don’t miss any opportunity for improvement.

In future issues we will look at some specific areas of opportunities that are often missed.