What are Operating Costs?

Operating Costs are the costs that rise and fall with the volume of work you do.  They include Production Costs and the Cost of the Goods you buy for resale (COGS). Reduce these by improving productivity as discovered by Henry Ford and later improved by Toyota.

All Businesses Have a Production or Operations Element

It is crucial for your business to learn skills to prioritise tasks, motivate staff, reduce waste, manage inventory to create operational efficiency. Note that all improvements here go straight to Profit.

Selecting Next Diagnostic Step

Learn to use the 12Faces Diagnostic Process to best advantage, click More Info.

Choices to Reduce Operating Costs and Improve Productivity

Manage Inventory and Reduce Cost of Goods Sold

Learn about the best inventory management tools; monitor Inventory performance; the sensitivity of Profit to change in Inventory price. Then manage your business Inventory and Work in Progress (WIP).

Productivity and Cost of Goods Sold

Improve costs and productivity and these improvements will go directly to your Profit. Now learn how Toyota improved its operational efficiency. Then work on labour efficiency, waste reduction and variable costs amongst others.

Powerful Gross Margin Analysis

The Gross Margin ratio is a window into one of the most common reasons businesses experience a fall in profit.  Learn more about why your Gross Margin% needs your attention and how to find and fix problems. 

Reduce Production Waste – 8 Types

Learn how to reduce production waste and increase Profit. Furthermore, waste applies to all industries, even offices and service. This covers Lean Management; Kaizen; capturing waste in the wild; prioritising waste removal; waste reduction (Muda) as Toyota identified.

Staff Motivation and Productivity

Manage yourself, staff, suppliers and others. This is crucial to your business. Covers all areas related to staff management; organisational charts; Peter Principle; Parkinson’s Law to name a few. Learn about constructive dismissal and redundancy. Having trouble motivating your staff? That’s covered. Direct link to Skills Modules are available at this link.

Monitor Operational Efficiency Cost of Goods Sold

Where do you start? After all, monitoring operational efficiency does not only relate to Cost of Goods Sold. It also relates to Revenue creation; business finances; Inventory management; cash flow and liquidity. Click this heading to find out more. Direct link to Tools are available at this link.

Focus on the Most Important Issues

How do you determine what are the most important issues? Here, you will find the tools for brainstorming, business planning and problem solving. Also, learn about the 80/20 Rule, 5 whys problem solving technique, weights and scores amongst others. Direct link to Courses and Skills Modules are available at this link.

How to use our Diagnostics

Click on relevant links above to drill down and find possible solutions to your current issue.

Know of other Diagnoses and Solutions?

Please let us know of other possibilities by emailing us with an outline.  We will update our resources so you will be helping those who follow you.

Find business problem solutions with other Diagnostic Tools

Business Symptoms of Unknown Cause

The reasons behind the problems concerning you may not be clear cut.  This Tool helps to narrow down the underlying reason for your problem and sets you on the path to solutions.

How to Increase Business Revenue

Investigate Sales, Marketing, Pricing, Customer Retention, Product Range, Distribution Systems symptoms and then eliminate inefficiencies to increase Revenue

See how to Reduce Operating Costs

Reduce Cost of Goods Sold, Production Costs and Operating Costs by improving productivity as discovered by Henry Ford and later improved by Toyota.

Ways to Reduce Overhead Costs

Overhead Costs or Fixed Costs like rent, permanent labour and other costs that do not fluctuate with your day-to-day production levels directly impact on your Operating Profit

Issues with Business Information Systems

Finance, accounting, IT and legals are information systems a business needs. Find solutions to common issues here.

Managing Staff and Your own Productivty

Managing staff and your own productivity are critical issues because people make your business work. Learn more on problem resolution

Business Planning and Business Decision Making Techniques

Planning need not be complex.  We show simple solutions with proven effectiveness.  Along the way, we introduce some decision making tools to simplify hard decisions.

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