But We've Always Done It This Way
By: Stephen Machin, CMA

One of the most frustrating phrases that a manager can hear from her staff is but we've always done it this way. It is easy for complacency to creep into an organization. Especially in today's environment where people are doing the work of 2 or 3 people as a result of corporate downsizing, it is sometimes easier not to question things that are working okay even if they are not optimal.

In my work with all types of different companies, I have seen many situations where a routine has become so entrenched that no one ever questions it anymore. I ran into this situation recently when a client asked me to review their overnight courier expenses. This client was spending close to $250,000 on courier charges to ship its products around the world. To complicate matters 2 of the items had been designated as dangerous goods, which besides adding significantly to the shipping cost also added additional training, handling and other costs to the company.

A fresh set of eyes can often see things that may not be obvious to someone who is too close to the action. In this case the shipping manager had been sending these items as dangerous goods for over 10 years and had not questioned the rational for the designations in many years. When we started the engagement we decided to split the project into two components. First we would assess whether there was an opportunity to reduce the shipping costs, and second we would challenge the dangerous goods designation assigned to the 2 products.

After a detailed analysis of the client's requirements and the service capabilities of the potential vendors it was determined that there was an opportunity to reduce the shipping costs. The results of the first phase were quite impressive with savings ranging from 20% to 27%.

The second phase involved a great deal more analysis and investigation. One of the biggest challenges was overcoming the internal preconception that some of the client's staff held that both products were dangerous goods and always will be dangerous goods. In fact, we were told repeatedly that we were chasing our tails. After a great deal of research we finally were directed to the correct government department that could make the declaration on the dangerous goods classification. Much to the surprise to the many people involved in the project we finally had the final ruling: one product would remain classified as dangerous and one was removed from the dangerous category.

Although our goal was to have both products removed from the dangerous goods classification it was still a significant victory to have one removed. The implications are significant for this client. Beyond the immediate costs savings by eliminating the surcharges, which in many cases were twice the actual shipping cost, this change in designation makes it much easier for the client to ship its products. It also removes some of the added complexities such as training and handling requirements that were previously required.

The day-to-day fires often keep us from all of the projects that we want to get to just as soon as things quite down a little. But sometimes our own preconceptions and biases can also prevent us from seeing cost reductions opportunities that may be hiding right in front of us. So if you hear those famous words but we've always done it this way your answer should be but is there a better way.