Money-making ideas for the profit-minded supervisor (Treasure Chest)

It can be costly to run low on essential supplies. It's also expensive to take inventory repeatedly. So what to do? Pelican Products Inc., a Florida machine parts manufacturer, solves the problem by setting minimum reserve requirements for each item and storing these quantities apart from the

When is the best time to consider possible staff reduction? "Clearly," says Manhattanbased management consultant, Eleanor Price, "when an employee quits or retires."

Price's recommendation, prior to replacing a departed person, is for the employee's supervisor to issue a memo to management justifying the replacement. The mandate applies to all personnel levels from manager on down. A "Resource Evaluation Committee" then either authorizes or disapproves the replacement. According to Price, "Too many presumed workloads are taken for granted. Manpower requirements in my experience often shift like the tides. Technological innovations, product and paperwork alterations, changing customer needs and other variables impact on individual tasks and duties."

The consultant could cite innumerable examples, she says, where vacated jobs were either eliminated altogether or chores spread among other personnel.

What would be the effect on long distance telephone usage if individual employee records were kept for each call made on a regular basis? "It would be drastically chopped with a bundle saved," Beatrice Rollins, office services manager of a Boston knitwear products company, writes TREASURE CHEST. Since recordkeeping was initiated two years ago, she reports, long distance toll costs have been reduced an estimated 30 percent.

Monthly listings include the names of individuals making the calls, number of calls made, average cost per call and purpose of each call. A controllers department audit committee reviews the sheets each month and evaluates usage against roughly set standards. Where toll calls seem excessive, employees are called to account. Although this rarely happens, says Rollins, the monitoring more than pays its way through the creation of awareness. "The trick," she adds, "is to get the message across to people that long distance calls are expensive and that needless minutes of talk eat up dollars."

A byproduct benefit, Rollins says, is that the system automatically prompts people to evaluate the possibility of cheaper ways to communicate -- letter, memo, wire or FAX for example.

Incentive bonuses, selectively applied and closely monitored, pay off if administered in such a way that they're not taken for granted.

Atlanta's Bell Manufacturing Inc., a consumer products company, sweetens take-home kitties for sales department personnel who rate high on customer-satisfaction surveys. Customers are invited to participate in selecting Employee of the Month candidates and are encouraged to report in to management regarding their perception of service and treatment.

The system includes all inhouse and field personnel except regular sales representatives who operate under separate incentive and compensation arrangements.

A highly recommended way to trim excess fat is to do battle with the Formidable Paper Dragon. Here, from the client files of Connecticut-based consultant George C. Sprain, who specializes in office productivity improvement, are profit boosting examples that worked.

Eliminate duplication -- A baby carriage manufacturer reported monthly sales by product and salesperson on a Monthly Sales recap. A second report listed the commission earnings for each rep. "Why not combine all this information on a single report?"a thoughtful supervisor asked. No reason at all. Estimated annual saving, $875.

Purge old files -- It's costly to store dated paper in prime office space. New Jersey's Galaxy Products Corp. conducts Spring and Fall Cleanings spaced six months apart. This keeps current files current and saves about $12,000 a year. Calculation is based on the estimate that it costs 19 times as much to keep records in prime as opposed to inactive storage.

Purge mailing lists -- How much advertising and promotion do you mindlessly send to. unqualified prospects? A study conducted by consultant Sprain disclosed that 18 percent of the names on a lighting company's list had either died, relocated or gone out of business. Twenty-one thousand dollars a year was saved by elimination of promotion catalogs and brochures costing an average of $1.96 per mailing.

Window envelopes -- The simple expedient of repositioning addressee names on monthly statements so they could be inserted in window envelopes saved a Nashville, TN, toiletries company $2,650 per year.

File search -- An alert accounting department employee won a $50 suggestion award when she recommended reorganizing file drawers more efficiently. Her simple idea: Keep active folders in front, older ones in back.

Who's winning the paperwork war in your company: You or the Dragon?

"Eliminate one-time use of job specifications," Norfolkbased engineering consultant H. Richard Preyer writes TREASURE CHEST, "and you may chalk up significant savings." Preyer reports that a client previously photocopied the original spec for pasteup to new job sheets. No more. Today specs are stored in the engineering department's personal computer and quickly accessed when needed. In preparing new job instructions, the variable information is keyed in and at a simple command automatically revised at high speed. Annual profit gain, $5,900.

What you don't know can hurt you plenty. That's doubly true if you're a manager who's lost effective contact with your subordinates. This precisely was pointed out on the Functional Evaluation Report prepared by a management consulting firm retained to determine why departmental performance and productivity was slipping.

Experience proves that as often as not rank-and-file employees are more likely to tell their supervisors what they think the boss wants to hear as opposed to what he or she ought to hear. This reality of business life was pinpointed by the consultants as a major cause of the slippage.

To remedy the situation, a new program was initiated. Under the system, a self-sealing "Letter to Management" is inserted into copies of the company's monthly publication. The letter-form invites workers to ask questions, submit ideas offer opinions, express gripes. Letters must be signed to ward off pranksters and cranks. But the submitter can check an anonymity box if he doesn't want his name revealed.

Since the program was kicked off 10 months ago, Personnel Manager Ellen Turner reports, 174 letters were submitted, half with anonymity requested, most of them helpful in one way or another -- several revealing information which wouldn't have been otherwise disclosed.

Cash in on spare clerical time. A one-word sign, AVAILABLE, serves as a valuable time and money-saving device at a Portland, Maine, textile manufacturing company. The sign is displayed by office personnel when their work is up to date and no further assignments are pending. It means they are available to pitch in elsewhere if needed.

As an incentive to display the sign, employees are permitted to openly read, or write letters, etc., when they run out of work. "The alternative," says Human Resources Director Ben Grisham, "is the furtive thumb twiddling so often indulged in during slack periods."

How many thoughtless spenders does your company support? A good way to boost cost-consciousness is to point out the amount of sales needed to cover each dollar of expense. If your net profit before taxes is 10 percent of sales volume, it would take $10 in sales to cover each dollar of expense. Relate this to wasted forms, carelessly damaged tools and squandered time, etc. It's the kind of comparison people can identify with.