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National
Clothesline
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The high cost of buying cheap
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The
memory of my management mentor is still vivid. My interactions
with him were in the restaurant business over 30 years ago.
He’d say certain things that,
“You never have time to do it
right, but always have time to do it over.” Far and away
my favorite. “The best is always cheapest, in the long
run.”
These thoughts become even more profound
if you braze them together, sort of. “If you do things in
the right way, in the first place, you won’t have to redo
them later and, in the end, you will have saved money by saving
time.” Consider these examples:
“The best is always cheapest, in
the long run.” Let’s say that you buy new shirt
equipment based on price. Perhaps it was a deal “too
good” to pass up.
But is it the right machine for you? When
buying shirt equipment, the upfront cost of the equipment has
little to do with it. Whatever machine you buy, it should be an
investment that will process at least one million shirts.
Let’s use that as a benchmark.
The equipment can cost (for example)
$38,000 or $55,000. If you are budget-minded, you’ll
probably opt for the former, but suppose it is the wrong
machine for you?
The difference in price is less than two
cents per shirt. I assure you that you will waste more than two
cents per shirt this year in five to ten different ways. If the
equipment that you bought at a discount under-produces, for
instance, it may save you two cents per shirt at acquisition,
but cost you an astonishing 3.8 cents more per shirt, for as
long as you have the equipment.
That’s $38,000 over the life of the
machine.
You can’t press 50 shirts per hour
with the bargain equipment that you bought, but 42 is almost as
good. I wonder. Let’s do a little bit of math.
One employee at $10 per hour (let’s
assume that this includes payroll taxes and related expenses)
presses 50 shirts per hour.
The cost per shirt for pressing (only) is
$10 per 50 shirts, or 20 cents per shirt. If you buy the wrong
equipment (that can only press 42 shirts per hour) because it
is $17,000 cheaper (or 1.7 cents cheaper per shirt), the math
looks like this:
One employee at $10 per hour (still
assuming that this includes payroll taxes and related expenses)
presses only 42 shirts per hour.
The cost per shirt for pressing (only) is
$10 per 42 shirts or 23.8 cents per shirt.
How does it make sense to get the wrong
machine?
It costs almost four cents more to press
a shirt on equipment that cost two cents per shirt less to buy.
The best, and seemingly more expensive
equipment, costs less. The best is always cheapest in the long
run.
If you buy a shirt unit that does a lousy
job but saved you $10,000 upfront, have you saved anything when
you realize that you need a second touch-up person? And
that’s a perfect segue into “You never have time to
do it right, but always have time to do it over.”
How much sense does it make to do a poor
job on the shirt unit so that someone else can touch it up? It
amazes me how often this is accepted as a way of life. It
isn’t a touch-up person’s job to do the
presser’s job over again.
Admittedly, you will need touch-up in
every shirt laundry. This is because touch-up exists to do the
parts of a shirt that the equipment can not do.
But then, by definition (mine anyway),
you should not touch up pressing maladies that are caused by
improper pressing techniques or by defective equipment.
Well, that needs clarification. A
customer can not pay the price for defective equipment or poor
pressing performance, so the pressing defect must be rectified
somehow, but it must be done in conjunction with fixing the
real problem.
An example: A touch-up person tells you
(communication is absolutely vital) that the sleeves have
wrinkles in the cuff area. Once management confirms that the
presser is failing to follow a particular procedure, the
employee must be retrained at once!
It is amazing that we often don’t
have time — or the need — to do something right the
first time, but we make time to do it over. We will train and
reprimand the touch-up person for the sleeve pressing defect,
but we must fix the real problem.
The same goes for equipment defects.
Touch-up will be your safety net that prevents sub-par quality
from reaching the consumer, but it must not be a replacement
for fixing the real problem.
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