When manufacturing with full or half-automatic equipment, the man hours should be minimized and the value is what is manufactured. In the case of service production, it is the opposite – the whole value lies in the future and the man-hours that the organization has its disposal and whether they can be used for value creation. Measurements show that just under two-thirds of the annual working hours are used fully productively – it is on average more than two hours each working day or in the order of 500 hours which constitutes a waste, ie. the opposite of Lean Production.
What does your business mean for these hours?
Increase the profit with capacity planning for service companies
Measurements have shown that it is possible to increase value-creating work by almost 50 percent from today’s level. Half of this is achieved with a simple pavement planning and portfolio management.
Example 1: Increase profit 2½ times with only 25 percent improvement One company has a turnover of SEK 10 million and has 10 employees at an annual cost of SEK 7 million and fixed expenses of SEK 2 million => Profit SEK 1 million. Plan and increased occupancy through portfolio management with 25 percent on the employees and 2 consultants are terminated. The result is increasing to SEK 2.4 million.
Example 1 + 2: Increase profits further to more than 3 times better
Apply delivery planning to milestones and include responsible stakeholder (customer) in the prioritization process – then the use of resources can be kept within budget and thus the timetable. This reduces the need for employees – another consultant said. Earnings now increase to SEK 3.2 million.
Increased profit by applying project management
Example 3: Switch to fixed price and keep the risk premium => 2 * profit Calculated profit = 25 percent and add 20 percent as the risk premium. Expand the project management and teach project managers to present a solution and work breakdown within the given cost framework. Include the customer in priorities of the delivery content. The cost framework is included and the resource used. Which gives resources to more projects within the same time period. For a project with a budget of SEK 10 million, profits increase from SEK 2 million to SEK 4 million.
Example 4: Reduce losses by avoiding delays A project that will last for one year uses year two to repay the investment and profit with the first three years. A project that is delayed continues to cost and displaces the revenues that will pay the investment. Each month’s delay costs 10 + 10 percent in round turns, in addition, the market window shrinks which yields revenue when the parent parenthesis is fixed. A project that takes two years instead of one will start to show positive results sometime during year five, provided that the product is at all relevant then!
Improvement program with warranty
We deliver the opportunity for higher profit through better productivity with existing staff by introducing control. We deliver training, a cloud-based project office, change management, and support service.
Choose between:
- Shared Service on an ongoing basis.
- Shared Service at a fixed price per month.
For more information on Manage Resources in Projects & Companies check:
https://archnordic.com/competencies/
Contact for Queries : +46(0)8-585 708 00 Email: [email protected]
