From insights come answers.

A series of articles from the Insider Pro team, in which we examine relevant topics and examples of current challenges that we see in our work with a huge range of organisations, across many sectors.

Changing Specification: The Key to Cost Reduction and Innovation

Posted by Jeremy Bowley
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In times of high inflation, changes to product specification may identify a great opportunity for cost reduction - a reduction in size, a change to the packaging, a modification of the materials used, or the scope of service provided.  All of these (and many more) offer good ways to explore cost reduction and may well reveal acceptable and sensible changes to the design or presentation of an item.

Insider Pro works with a wide range of sectors from hospitality to healthcare, manufacturing to retail.  Examples of changes to specification that we have seen recently include:

  • overly sophisticated or unnecessary packaging
  • overly engineered component parts
  • excess portion sizes or unnecessary ingredients
  • excessive quality of building materials where more basic were perfectly adequate and the customer would be unlikely to notice
  • excess data centre capacity
    businessman hand using tablet computer and server room background

Do you know what process is employed within your business to drive and approve these changes?  Have they been explored and tested by all stakeholders?  Who is responsible for checking the data and calculating the impact?  Who is ultimately accountable for the change? 

Changing a specification very often drives innovation and in the long-term, can reap huge benefits.  But without a tight, agreed process with checks and balances along the way, there may be unforeseen consequences, not always good!  We have seen errors in the data, costs spiraling out of control, new specifications unable to do the job they were meant for.

Ask yourself whether you know the process in your business.  And if you are not confident it exists, ASK Insider Pro.

Topics: Supply Chain Management