How to Become a Hidden Cost Hero

Hidden Cost Hero

Hidden costs are everywhere. Have you done an audit on your facility recently? If you dig deep into your facility’s daily routines, more often than not, you’ll find outdated and inefficient processes or established procedures that are not being followed correctly.It’s highly likely that hidden costs are lurking somewhere in your facility right now (kind of creepy).

What is a Hidden Cost?

“A hidden cost is an “expense not normally included in the purchase price of a product or service, such as maintenance, supplies, training and upgrades”.

BusinessDictionary.com

4 Examples of Hidden Costs

Check out the examples below to see if any of these ring a bell…

  1. Using the wrong product – If you apply the same aggressive degreaser you use to clean the kitchen floors to the waxed floors in your hallways and open spaces, it will strip the wax coating right off or severely dull the shine. Oops. Or, if you use the wrong size can liners for your waste bins, you’re literally throwing money away in the trash.
  2. Using the product the wrong way – The cord on your vacuum is not meant to function as a rope to drag the vacuum along or lower it from one level of the building to the next. If the vacuum brush is not adjusted appropriately for the task, you are likely to encounter “unexpected” service costs. Equipment is often neglected in its daily routine for the sake of convenience or due to a lack of proper training.
  3. Not caring for the product properly – Using the standard laundry cycle that has fabric softener and over-dries your microfiber linens is a sure-fire way to shorten the life span of your investment. (Learn How to Care for Microfiber)
  4. Wasting labor dollars by not automating people and processes. If you ship a lot of pallets in your facility, moving from a manual to automated stretch wrapping system can cut stretch wrap usage, speed up the production line and save your employees’ backs. An automated system often pays for itself within 6 months.

The cost of hidden costs could be a tarnished business image or wasted time, labor and money. Find out how to look for and diminish the effects of these hidden costs – become a Hidden Cost Hero!

To Avoid Hidden Costs, Always Ask Yourself These Questions:

  1. How much of the desired outcome do you want?
  2. How much can you afford?
  3. Are you getting what you paid for?
  4. Can you maintain it? How often will you need to?
  5. What can be automated? When will it be time to automate a process?

Also, tap into your new employees/hires to gain a fresh perspective on your business: 1 Thing New Hires Can Do That Others Can’t

To minimize hidden costs, focus on working smarter! In general, people like the familiarity of routines – they are a great way to maintain consistent results, but outdated routines can work against efficiency. Take a step back to evaluate your facility’s routines on a regular basis, so you don’t fall victim to hidden costs.

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