Profits
Good
decisions makes for a good increase in profits. Every year,
SAMI conducts value studies that generate increased profits
for many firms. The cost to
these businesses to develop
the profit generating plans was between $1,000 and $50,000
(excluding implementation costs). The average amounts returned
as a result of implementing these plans ranged between 50
thousand dollars to 250 million dollars above study and implementation
costs. All of the businesses made a profit that exceeded the
cost of the value study activity. Further, these returns are
for the first action year. Most of the increased profits will
continue for many years to come. In addition, other factors
that are difficult to quantify such as: improved personnel
morale, easier operations, and reduced potential for injuries
were identified and implemented.
Costs
Naturally,
some activities do not make a profit in themselves. However,
they are usually required to support the profit making ventures.
Other activities must be done due to regulations or other
reasons. Some of these activities are required simply because
a business exists. To limit the effect of these costs on profitability,
ways to minimize or remove them can be examined. Further,
governmental organizations rarely operate on the basis of
monetary profit. They operate to meet a mission specification
and are given funds to meet that mission. When the mission
is met, it is expected that the intended social benefits are
obtained and improved. Often, governmental project results
or scope are vastly improved for the same authorized funding.
Resource
Requirements
Resources usually involve money, but may cost much more. If a resource (person,
equipment, etcetera) is unavailable, in very high demand, or is difficult to obtain quickly, we may consider it to be too valuable to make
it available. Additionally, if you free an existing resource, it can often be used in other endeavors. Thus, resources are often a crucial
component in reducing costs and increasing profits.
SAMI
facilitated value studies and conducted selection phase activities
have allowed our customers to significantly improve their
staff's production. While we have not received enough information
to know all the results, the return that our customers have
shared with us (in the last three years) represents more than
100 staff equivalent positions. The increase production allowed
people to spend more of their time on high return activities
that produced a better return for the customers of their products
and services. However, freeing resources does not always mean
laying off people. Both SAMI and our customers know that the
adage "people are are most valuable resource" is
more than just a line or slogan. Thus, when a value study
identified changes to activities that would be misplaced in
the business, the value study also examined how to utilized
the valuable staff resource. Thus, the affected people were
often realigned within the organization or placed in new opportunity
positions, to better suit both their needs and the business.
Risks
Everything
involves risk. Therefore, risk reduction or mitigation is
a necessary part of everyday business operations. Freeing
a business of its most likely risks, reduces current cost;
in the form of insurance and other risk protection methods.
Further it also reduces future costs; through avoiding litigation,
loss of property and safety, etcetera.
Though
facilitating the use of the Value Method for our clients,
they have identified and avoided significant risks. While
the true cost of risk avoidance is never known, many case
studies are available. For example, one client found that
a planned expenditure of more than 15 million dollars had
a significant risk of failure to meet the need of their customer.
Through a value study, they discovered the risk, found an
alternative way to meet their objectives, and were able to
avoid the failure risk. Thorough use of the alternative, they
also found that they could also save more than 11 million
dollars of the original 15 million dollars of costs. In another
case, the client found that the project cost was rising rapidly.
It had gone from an original projected constructed cost of
4 million to 8 million, and at the moment of the value study,
appeared to have a potential to exceed 12 million should the
situation continue unabated. Through identification of alternatives,
a concept that met the original project objects was identified
for an estimated cost of 4 million (the original amount).
The project was eventually constructed for 3.5 million (0.5
million below the estimates). Most of the reduction was through
reducing risk.
Improving
Customer Satisfaction
Quality
Higher
quality products generate reduced costs for the provider of
the product, and improved customer satisfaction. Thus quality
is a key for both the business and the customer we serve.
Reduced costs to create the product that we sell to the customer
help our businesses improve profitability. Products that continue
to do what the customer needs and wants creates satisfied
and loyal customers.
Each year, through consultation and value study services,
SAMI helps our customers increase product quality. Some past
examples are: food service kitchen activity quality improvements
that were noted by both health inspectors and the client's
customers, higher quality product choices that met the clients
customer base better and increased business traffic, and increased
quality in measurement of material input that allowed higher
throughput capacity.
Product Improvements and Development
While quality is a major component of customer satisfaction and
loyalty, the improved or new product is the most prevalent item that lures our customer to another business. The highest quality products
is of no value if it serves a past need that is no longer relevant. The key is the innovative new product, and innovations is a part of our
name.
People
regularly replace products with new or improved products.
People are always looking at the new computer, new car, or
new process. Innovations generate the new products that better
meets the need and desires of the customer. A key part of
the systematic approaches we use rest in the innovative spirit
of people.
We
have been privileged to assist our clients in generating innovations
for their business. Examples include: a new control system
that reduced the expertise requirements and allowed the operators
to perform more tasks; a pipeline construction procedure that
allowed people to be more productive, produced a more reliable
source of water for the user's, and reduced future maintenance
requirements; and consolidating two business concerns so that
the combined business increased their profitability, added
convenience to their customers, generated more reliable customer
base, and increased the projected growth potential for the
business for the next 5-years.
Communication
Lack
of communication is rarely intentional. It occurs for a multitude
of reasons. When the right kind of data is lacking, for whatever
reason, mistakes occur. When communication with customers
or within an organization fails, it can cause disastrous problems.
The results can be anything from the expense of creating a
product the customer has little interest in purchasing; to
costly misunderstandings of management direction that cause
unnecessary expense.
In
addition to the communication aspects within the Value Method,
SAMI utilizes cooperative agreements with communication experts.
Through the Value Method, we are able to bring diverse and
conflicting demands together for a common purpose. Through
our cooperative agreements, we provide added communication
skills enhancements for our clients.
Many
examples of successes that have been achieved by our clients
within the last two years are available. For example, we helped
one client develop measurement parameters that improved understanding
of what their customer needed and wanted. This allowed them
to response more promptly to the customer with new or improved
quality products. In one value study, our client obtained
a better understanding of product control requirements that
allowed significant increases in product quality. For a government
client, the government's customers did not fully understand
the impacts of their requests and suggested solution. Through
use of a value study, the impacts were determined and alternatives
generated to avoids the impacts and meet the purposes behind
the requests. Through use of the value study and communication
procedures, recipients were informed of the higher level of
benefits available the, previously not favored, techniques.
Thus, a product that better met their needs was accepted and
used. In each case, improved communication styles were obtained
that are expected to assist in future activities.
How is it done?
Our facilitators
follow a procedural value job plan, use their extensive experience,
and coordinate with the client and their consultants. SAMI
services assists our customer in generating the best options
so they can make high value decisions and maximize their team's
productivity. SAMI provides the added training, value study
facilitation, consultations, or other services necessary to
generate the results. Sometimes, this involves the services
of our cooperative agreements with other companies. This may
have include the addition of technical consultants for activities
such as value studies or communication experts. However, with
the exception of the facilitation or other specially service
provided by SAMI, most often the efforts needed consist of
our clients' personnel. After training, many of these personnel
have developed enough skill in the use of the procedures,
that they continue to use them to benefit their employer.
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