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Cutting Costs to Keep More Cash

(August 2008) posted on Wed Aug 13, 2008

Trimingham describes how creatively reducing expenses can allow you to earn more in the long run and keep your valuable workforce on the payroll.

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By Thomas Trimingham

The next step of the process at XYZ was cutting costs in product fulfillment in the art department. Included in this area were the art department’s development and production processes. In the interest of keeping the informational overload to a minimum I highlighted the main areas in each department that relate to the biggest impact on cost cutting. XYZ realized the biggest benefits by following the 80/20 rule and focusing on the 20% that would contribute the most gains. The company achieved the best results in each area by using the destination process of visualizing the ideal scenario and then backtracking to see what was blocking it from becoming reality.

Art department—developmental The biggest roadblock in this area of XYZ’s art department was the emphasis on all custom artwork and the tendency to have multiple revisions on smaller jobs. The ideal destination for this would be to have several catalogs of quality artwork for the smaller, repeat customers to pick from and keep the custom work for the larger orders that can absorb more of the cost. The revision issue was a common one for a smaller shop. The main desired result was to have a barrier and accountability imposed more on the client so they’d be required to accept the cost and value of art changes. The following steps were implemented to resolve the two art developmental issues:

1. Allocating hours per week to creating stock art for in-house catalogs.

2. Contacting qualified freelance artists to help develop catalog art, if necessary, with offset funds from stock art charges. A small usage fee on stock art would help budget for the creation of new pieces so the art book would continue to grow and wouldn’t get stale (Figure 1).

3. Sales staff was retrained and encouraged to qualify orders in process to guide them towards stock artwork when doing so would make sense.

4. All approvals and revisions were directed through a salesperson instead of the artist so that all steps could be documented with each level of revision billable when agreed upon.

5. Art revisions now made through a PDF sheet along with e-mails so clients can follow the artwork’s progress and find out about related costs. This system motivated clients to accept responsibility for selecting a revision option and to do so very judiciously.


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