Cheaper can cost more

Linda LaitalaBusiness, Leadership, Management, WorkLeave a Comment

Cheaper can cost more

Do you agree that cheaper sometimes means it can cost more?

For years Mike and his employees have been frustrated with inefficiencies due to cramped space and disorganization. His company is in dire need of space dedicated to storing tooling and fixtures.

Mike finally agreed to add an addition to his shop; plans included a new tool room. Everyone was excited at the prospect of a decent storage area. Early on, Mike got a quote for sheetrock and shelving in the new tool room. The price wasn’t outrageous, but Mike thought, “I can get it done cheaper”.

As the addition progressed, Mike added extra touches: heavy duty hoists, a wall around the compressor to keep noise down and an extra outside access door. Unfortunately, the loan money was depleted before the tool room had even been started.

The results are discouraging:

  1. Inefficiency will continue to be an issue because there is no organized area for tooling.
  2. Employee morale is down; Mike shared his plans, and his employees were looking forward to the improved spaces.
  3. Mike blames himself for disappointing his employees and is frustrated by his inability to manage project costs more effectively.

Mike was so wrapped up in the project, and with keeping up with the day-to-day activities of his business, that he never got around to getting another quote. The lesson is “I can get it done cheaper,” isn’t always cheaper.

The road is easier together,

Linda Laitala, President
Raven Performance Group

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