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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.

product improvements

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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