COST-REDUCTION PLAYBOOK: WHAT’S IN YOURS?
Your favorite sports team probably outlines its game plan in a playbook. Team members consult the book to better understand the actions they’re expected to take as the game unfolds. Playbooks can be useful for business teams too. Let’s say your goal is reducing owning and operating costs. If you were asked to develop an O & O cost-reduction playbook, how would you define each team member’s responsibilities?
As an owner, most of your effort is directed at controlling the owning side of the equation. Owning costs are typically fixed costs that can’t be changed once a deal has been sealed. Your key responsibilities:
- Know your utilization rate. Make sure your existing equipment is fully utilized before adding another machine.
- Select the right sized equipment for the job. Bigger isn’t always better, but smaller isn’t necessarily more cost effective.
- Choose features, attachments and options that match the environment and application in which you’ll work.
- Invest in features and technologies that save costs over time.
- Look at all the options. A low-hour used or rebuilt machine might meet your needs at a lower cost than new.
- Factor in residual value. Paying for quality often reduces total costs over the long run.
- Consider buying a dealer-delivered maintenance plan—upfront—to control future costs.
- Shop for competitive financing and insurance rates.
To reduce operating costs, the owner can:
- Invest in training to improve operator skills and techniques.
- Foster proactive maintenance planning and a before-failure repair culture.
- Make idle-time reduction a company priority.
- Create an environment that rewards cost reduction and innovative thinking.
As an operator, you have been entrusted with a powerful, expensive asset. Your principal responsibility is running that asset safely and efficiently. This requires a commitment to:
- Confirm the machine’s readiness to work by completing a walkaround inspection at the start of every shift. Follow the process outlined in the Operation and Maintenance Manual.
- Inspect the unit again at the end of each shift. If things look different, tell the next operator and note the information on your shift report.
- Pay attention to alerts and warnings received while you work. Take action as indicated and keep your supervisor informed.
- Use recommended techniques: smooth shifting, steady acceleration, gradual turns, controlled travel speed, no wheel spinning, minimal non-productive movements.
- Take advantage of all training opportunities your company offers.
- Be open to using technologies and features that increase productivity and reduce fuel consumption.
- Avoid excessive idling. Turn your machine off at lunchtime, during breaks or if you’re stopped for more than five minutes. Limit warmup and cooldown to three minutes or less.
- Ask for feedback about your productivity, fuel consumption and idle time performance (from telematics data). Work with your supervisor to set improvement goals and measure progress.
As a maintenance or service professional, you play a vital role in driving down total operating costs. Your focus:
- Work with operators to ensure they complete daily inspections of key systems and components.
- Follow manufacturers’ recommendations for maintenance processes and intervals, adapted as needed to reflect your environment and application.
- Consult telematics data to plan maintenance intervals that reflect your real-world work environment.
- Use telematics data, fluid analysis and other condition-monitoring tools to find and fix problems before failure.
- Schedule maintenance and repairs strategically to limit impact on production and costs.
- Consider using remanufactured parts to reduce costs and increase uptime.
- Keep precise, accurate maintenance and repair records to strengthen residual value.
WIN THROUGH EXECUTION
A good playbook can provide clear direction for any team, but ultimately, winning is really about execution. Establishing accountabilities. Taking action. Measuring results. Managing progress. What role will you play in helping your organization execute its cost-reduction plans?