Tuesday, April 30, 2013

Saving Money on the Little Things that Count

Yesterday I visited Nails by Phuong for a pedicure. It's the second time in my long life that I have had a pedicure ... the first was in Bali last year when I opted for a pedicure instead of a massage. The thought of having some attractive 20 year old Balinese lady rubbing my legs and back was a bit too much. Yeah, so I'm a coward, but my toe nails really did need some work, so they were the priority.

Phuong is a personal friend and, as she wasn't all that busy ... I was first customer for the day, I had time to observe the operation to check out what happens. After all, it's different here than at Bali.

The first thing Phuong did was fill a foot bath container with warmish water to clean my feet and soften my toe nails. Now, In Central Australia, ALL our water is artesian, coming from an underground spring that replenishes from as far away as the mountains of Papua New Guinea (as strange as that may seem, but a hydrogeologist friend swears that's the truth). We NEVER waste water. Although we are one of few Australian states that doesn't have water restrictions, we are very careful with the water we do have. If our water runs out, we are doomed.

So, when Phuong (who is Vietnamese and comes from a country with a high rainfall) filled the footbath much higher than my feet, I immediately started mental calculation of water consumption.

In Central Australia it costs $1.8725 AUD per kilolitre. It doesn't sound like much until you add up the yearly or whole of life business cost. Then there is the extra power cost for heating up the additional water.

Consider this additional cost with other consumable costs and it's clear that a good manager/business owner takes into account:


  1. the purchase cost of consumables (why buy the $5 handwash if something worth $4 will do the job equally as well?)
  2. how much of the consumables are you using and whether you are over using the products
Obviously the scale of the organisation will determine whether wastage adds up to hundreds of thousands per year, or in Phuong's case, merely hundreds or thousands. Either way, it has an impact on your profit.

What products and consumables are being used in your organisation that may be wasted? What do you think the annual cost could be? Please comment and tell us.

Robin

PS: I remember during the Vietnam war era, the Australian Air Force (RAAF) took delivery of a number of F111 aircraft. Each had a Gatling gun up front that fired hundreds of rounds per minute. The RAAF placed a maximum on the number of rounds each gun could be loaded with as each bullet was worth more than $3 and some of our trainee pilots had trigger heavy fingers when it came to target practice


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