By taking advantage of renting or selling surplus capacity, you can boost your Income.
Has your business accumulated surplus production capacity over time?
Excess capacity is sitting there doing little towards improving your business. Very often, it has associated costs so it is a drain on your Profit.
By reducing the surplus capacity, and its associated costs, you can:
1. Generate income for the capacity if it is rented.
2. Reduce costs if the capacity is sold.
Surplus capacity has a tendency to grow over time for the following reasons:
- Staff still employed but in tasks no longer needing them.
- Staff now in excess because of better equipment or work practices.
- Equipment purchased for processes no longer needed, or operating more efficiently. Therefore, less capacity is required.
- Equipment replaced by other equipment but still in the business; even if it is mothballed.
- More space than now required for the same operation.
- Space that was used for processes no longer being done.
Now, depending on the reasons above that are relevant for your business, go to its sub-topic listed under Lesson Content below.
For more help understanding any issues relating to this Section of the Turnaround90 Campaign, use the 12Faces Diagnostic System to drill down to root causes of problems and find our suggested Treatments.