Tuesday, June 27, 2006

An Eyeball View Of Corporate Reinvestment

Working for a big company is quite different than working for a little one. One of the things that stand out most between the two are how they go about saving money. Both types of companies will look at labor to see if they could cut hours. But one thing that I notice most often is reinvestment. Some of the bigger companies, when trying to cut deeper than labor, will avoid spending funds on repairs to materials, delay shipments of replacement materials or allow a substandard level of service. Most companies would rather avoid the latter but let's look at laser eye surgery as a subtle example.

Each company uses a specialized blade to cut a flap over the cornea prior to the laser being employed. This expensive blade can be sterilized for reuse but each reuse dulls the blade more. Some companies will use the same blade 3 times, some may use it more and a few use it once and toss it. Every reuse of the blade cheapens the cost of the procedure but increases the risk of a tear of the flap. So one could save money by not replacing the blade and taking a chance on customer dissatisfaction (with a longer healing time and higher chance of infection.) So in this instance putting money aside to replace materials improves your chances of a successful operation. But, this happens in many industries. Tires have to be replaced in auto racing. Sandpaper has to be replaced in carpentry. Sprinklers have to be changed in landscaping. But of course, cutting the costs of any of these items increases hazards, shoddy products or water waste. Have you ever seen a lack of reinvestment in your industry?

5 comments:

Vavoom said...

All the time. In science, investment comes in monetarily. However, personal investment in people is sorely lacking.

Anonymous said...

We Gov'ment employees always know what it's like to be underfunded for supplies, equipment and training. We must be inventive to recycle and reuse, and it does cut productivity on many levels.

Desert D said...

Cutting corners (or in this case corneas) is the American way. When a major airline removed one of three olives on their in flight salads, it saved them about $1 million per year. Somewhere, an executive got a bonus for being so frugal and the employee that actually thought of the idea was given a voucher for free food in the aiport.

LoraLoo said...

Anonymous was me...LOL I was apparently too busy recycling to sign my post!

Teri said...

Don't even get me started on education :)