Competitiveness, especially for small and medium-sized factories and developing enterprises, they always encounter development bottlenecks at a certain period of time, always feel that the cost of operation has been rising, but it is difficult to find the "location" of the cost, which we call "hidden cost". This is like a hidden disease in a living body, which cannot be cured for a long time and lingers, becoming a driving force for factory operators to frown.
If these "hidden costs" can be found, it is undoubtedly like finding the "pathogen", so the next step of "prescribing the right medicine" must be the time to take off again. If you can summarize the various "hidden costs" that often exist in enterprises, enterprises can use this to conduct comparative self-examination. Today, are you still "invisible"?
01 Factory talent flow cost
Many factories are very lacking in human resource management. They believe that talents are unlimited, and they become "iron camps", and employees naturally become "flowing soldiers".
It must be said that the departure of a factory technician is a lot of cost for the company. Because the company has to bear the initial cost of recruiting new employees for the position, and also bear the risk of whether the new employees are suitable for the position. New employees also go through a running-in period before adapting to the factory process. The departure of important old employees may result in the loss of important internal data or information, and after leaving, they may enter the company of their competitors.
Therefore, the loss of employees, especially old employees, will undoubtedly bring the company several times higher expenses than its income. After many small factories have been in operation for many years, you will find that they have always been such a small team, and except for the boss, no employee has stayed since the establishment of the company. I think this may be an important reason why they cannot develop.
02 Overtime cost
Many bosses always think that employees "forgetting to eat and sleep" after get off work "working overtime" is a kind of dedication phenomenon. Little do they know that this may imply very high costs. There are three reasons:
First, the reason for overtime is not necessarily because the work tasks are too heavy, but because of the low work efficiency of employees. Overtime means low efficiency. If the objective work tasks are indeed very heavy, then the company should add new personnel and positions in time for real development and progress.
Second, overtime consumes more employees' energy and physical strength, seriously overdrawing employees' health. In the long run, some important employees will not be able to perform their functions for a long time, and there are hidden dangers that will burden the company. For example, some mechanical operators may become mentally ill and cause accidents due to long overtime work, and the company will pay a heavy price for this.
Third, overtime employees are not necessarily "doing their jobs properly". Some employees use the company's resources to do their personal things after work, and also receive overtime pay from the company. Many companies' important losses and data loss occur after get off work, and overtime becomes a dead corner for companies to "hide dirt and filth".
03 Manufacturing process cost
Too many chaos in factories are due to processes. This is a common problem in corporate management. Any slow-growing company must have chaotic or unreasonable processes. They bear a high cost for this, but they have always turned a blind eye.
Process is the industrial chain of enterprise operation. Just like the assembly line, without scientific and reasonable manufacturing process, the systematic control of each process will be lost. Many works will be abandoned halfway, and many works need to be reworked. But we have to admit that this will become a mess that binds the factory's feet.
04 Meeting cost
The operation of a factory is nothing more than a race against time. Meeting is a collective activity for the factory to solve problems and issue instructions, but it is also a high-cost business activity.
Because this activity is often a collective activity participated by many leaders. Every minute that passes means the number of minutes of the total number of participants, and many managers of companies have not mastered the skills of holding meetings. There are six no phenomena of "no preparation before the meeting, no theme during the meeting, no execution after the meeting, no need to attend the meeting, no time control, and no margin for speaking".
05 Job misalignment cost
There is a famous saying in human resource management: "Put the right people in the right position."
Some factories arrange technicians to spend a lot of time mopping the floor, cleaning, and wiping machine tools every day. Some leaders also take the lead in participating, which seems to be a good thing. I couldn't help but sigh. This factory is engaged in manufacturing. Why would it spend so much money to hire unprofessional cleaners?
In fact, this reflects a very clear mentality of the bosses. They think that these employees are hired to be used. As long as they have people who can do it, they don't need to spend more money to do it. But we found that they paid a high price for this. 06 Procurement cost
Procurement has different ways in different companies, but it is an important cost part that affects factory operations. We often only focus on the price and quantity of procurement, and it is difficult to see other factors besides this.
There was a product branch of a mold company. When doing a new project, the project team had a daily operating cost of 80,000 yuan. However, on the eve of the product launch, the procurement department spent a week to purchase packaging worth more than 100,000 yuan. The reason was to find a low-priced supplier to save procurement costs. The entire marketing team had to wait for an extra week and could not sign a contract with the customer.
This phenomenon actually exists in many companies. The pursuit of reducing the direct cost of procurement ignores the "hidden costs" that coexist at the same time. Of course, reducing direct procurement costs does not conflict with this article. Here, we are talking about the procurement department of the enterprise. It is necessary to comprehensively weigh various indicators from the perspective of overall operation to truly control the cost expenditure of procurement.
07 Communication cost
In today's economic turmoil, the pace of factory operations is also getting faster and faster, but everything has a certain limit. Fast-paced operations have also brought many troubles to enterprises. Communication is an important part of enterprise operations. Many companies are doing a lot of system training and spiritual training, but most of them do not have "communication skills" training.
In most factories, you will find that in the process of communication between colleagues, there will be serious distortion, or words will not express the meaning, or answers will not be asked, or hundreds of people will have hundreds of answers... This phenomenon, to say the least, makes many processes become invalid processes, or loses many important opportunities. To say the most, it may bring hidden dangers to the enterprise. This is a typical cost increase caused by poor communication.
08 Stagnant resource costs
Stagnant resources can be said to be the most extensive "hidden costs" in enterprises, such as idle equipment, backlog of inventory, low-utilization job positions, idle funds, shelved business, etc. Although they may not continue to consume the investment of the enterprise, they are part of the enterprise's assets, and the enterprise will bear hidden costs such as interest for this.
Therefore, the amount of stagnant resources in an enterprise reflects the level of resource utilization of the enterprise.
09 Cost of mold enterprise culture
Some people say that corporate culture is like the soul of an enterprise, which will be reflected in the mental outlook of each of its members. This culture began to be established in the early stages of the establishment of the enterprise. It is influenced by the culture, habits, skills, occupations, likes and dislikes of the founder of the enterprise. Therefore, some people say that corporate culture is the boss culture.
However, many people may not agree that corporate culture will become a cost, but it is true. We will find that the employees of some factories are depressed and their work efficiency is extremely low. No matter how excellent the employees are, as long as they enter, they will either leave soon or become like that. We cannot help but say that this is an "environmental" problem. And this "environment" is exactly the corporate culture of this enterprise.
Corporate culture is like the life of an enterprise. It will accompany the enterprise throughout its life and can only be adjusted but not recreated.
10 Credit cost
This is a cost that involves long-term returns. Honest business is like honest people. We found that many factories are accustomed to defaulting on suppliers' payments, employees' salaries, deducting others' money, defaulting on bank loans, etc., thinking that this can reduce the pressure on the company's working capital.
However, in the long run, this will become a serious hidden cost of business operations: first, suppliers will definitely include time costs in their quotations, and such companies cannot purchase raw materials or services at the lowest price. Secondly, employee salary arrears violate labor laws and regulations and are in danger of being punished.
And defaulting on bank loans and deducting others' money will greatly reduce their credit rating, and when the company encounters difficulties one day, it will be surrounded by enemies. Undoubtedly, the factory will pay a heavy price for this, but in fact it has not gained any benefits from it.
11 Risk cost
It is the dream of every entrepreneur to push the company onto the fast track. But the risk factor also increases at the same time. Especially for large and medium-sized factories, although they are developing rapidly and earning a lot of money, once a crisis occurs, it will be disastrous.
Many cases have proved that many risks of enterprises are caused by insufficient foresight or poor management. Before the risk occurs, hidden dangers have been buried. And many large enterprises or well-known enterprises have perished because of a risk. It can be seen that risk is a crucial hidden cost. And this phenomenon is not obvious, it is really "no sound, no sound, but a sound is amazing".
12 Entrepreneur cost
"Entrepreneur cost" refers to the cost brought to the enterprise by the boss of the enterprise itself. There is a good saying that a soldier is a bad soldier, and a bad general is a bad general. Entrepreneurs are like the leaders of an army, and they are the employees with the highest cost paid by the enterprise. Many bosses of private enterprises have turned themselves into the "emperors" of the enterprise, and they have the final say in everything, and all employees have become execution machines. However, the defects of the entrepreneur's personal factors will add a heavy cost burden to the enterprise.
This phenomenon is mainly reflected in small enterprises, but it also exists in large enterprises. We can also extend this cost to every department and even every employee of the enterprise. Because everyone is responsible for their own work, we often emphasize that within your scope, you are the leader and you have the right to make decisions.
However, many leaders have always been self-centered, which will greatly reduce the team's combat capability and increase high hidden costs. I remember once saying to a boss who complained about the company's lack of talent: "What your company lacks is not talent, but the wisdom to discover and make good use of talent."
From the above, it can be seen that factories often have to bear many burdens in their operations and management, and hidden costs are the heaviest burden among them. Discovering and effectively reducing the above hidden costs may be a powerful measure for the factory's progress, and this is also the real drawback of many factories.
