What’s Better: Adding
Revenue or Reducing Expense?
Since it probably costs money to raise revenue, as a first option, many managers choose reducing expenses; and SMI is providing tools to enable its member companies to do that. In fact, in most cases, the cost reduction far exceeds the cost of SMI dues.
Over the past few years, SMI has initiated programs that reduce the costs of:
- Health care.
- Shipping.
- Office supplies.
- Package delivery.
- Fatigue testing.
Not every program is for everyone, but this list should include a cost reduction that plumps your bottom line.
Health Care: When annual increases of 15% to 25% are common, no company can ignore a health program that promises a stabilized health care cost. Through Trustmark Insurance and a program combining the membership pools of five metalworking associations, we believe we can provide benefits at reduced prices. If you are getting a “good deal” now, then we can offer a comparison that either verifies how good you have it, or gives you a viable alternative to consider.
This program has been in effect only since July, but SMI, itself, has seen its health insurance cost drop by 40%. Will everyone see similar benefits? That’s a hard question to answer, but it’s a question that needs answering by every company facing the staggering health care costs that bludgeon profit potential.
Shipping: Through Yellow Freight, SMI is offering discounted shipping costs that have yielded big savings to several members. In 2006, there were 65 member companies that saved a handy total of $141,461, or approximately $420 per shipment.
The Yellow program requires SMI members to enroll before benefits start to accrue. This program may or may not be significant in every instance, but, in your case, maybe it is … Why not take a look and evaluate?
Office Supplies: With serious discounts available through Office Max, SMI members can chip away at one of the most hidden expenses in the G & A category.
Every office uses paper, ink, pencils and stuff. Through this program, participants can save 25% or more on items that are everyday staples. This is the perfect example of a little bit here and a little bit there becoming a nice tidy sum somewhere later in the year.
You buy office supplies now, so why not get the same stuff cheaper?
Package Delivery: DHL has become a service provider and is available to offer discounted pricing to SMI members.
Fatigue testing: Bodycote will offer dynamic fatigue testing on springs to SMI members at a 15% rate reduction. This discount applies to equipment setup, equipment run time, technician labor time and test reports. No reduced rates will be given on costs associated with fixture design and fabrication.
Like virtually all association programs, the benefits accrue to those companies that get involved and participate. I encourage all members to review these opportunities and potentially pay for your SMI participation with the money you save. Details are available on the Members Only area of www.smihq.org.
SMI Goes Coastal
The next stop on the Luke Zubek speaking tour will be at NESMA (New England Spring and Metalstamping Association). Zubek, SMI technical director, was the featured speaker at the West Coast Regional Meeting in September.
Luke’s appearance at NESMA concludes the series of seven regional meetings over 2006 and 2007. The meeting is scheduled for October 23, 2007 at the Clarion Hotel in Bristol, CT. An open bar reception begins at 5:30 p.m., followed by dinner and presentation.
Luke will discuss root causes of spring failures, including the mechanisms and characteristics of fatigue failures.
The program will have special significance for company owners, supervisors and general managers.
Interested members can contact Lynne Carr in the SMI Office at (630) 495-8588. v
Ken Boyce is the executive vice president of the Spring Manufacturers Institute.
He brings more than 20 years of association management experience to the institute and has achieved the Certified Association Executive (CAE) designation of the American Society of Association Executives.
Readers may contact him by phone at (630) 495-8588 or fax at (630) 495-8595.
Badger Precision Spring Inc.
Location: Genoa City, WI
Primary Contact: Christine Armstrong,
vice president
Web site: www.badgerspring.com
“We manufacture compression, conical and barrel springs with open, closed or ground ends; torsion springs with special formed ends, if required; wire forms of various shapes; and metal stampings, such as brackets, spring clips, contact plates and flat springs. We also perform secondary operations, such as grinding, bending and looping. Technical specifications can be found on our Web site.”
Three Ways SMI Benchmarking Surveys Help Your Business
Benchmarking results provide the rationale and evidence for shifting or reducing resources.
Good decisions begin with good information.
1. Benchmarking assesses what’s most important.
- Identify strengths and weaknesses.
- Speculate about own performance.
- Industry standards provide evidence to rethink assumptions.
2. Benchmarking informs decision-making.
- Few businesses have unlimited resources to invest.
- One of the major barriers is the inability of managers to shift resources from historically established operating procedures.
- Benchmarking identifies low performance factors that have great impact on profitability.
- Prioritizes for the decision-maker where an investment of resources will have the greatest impact on improving performance.
3. Benchmarking motivates employees.
- Reinforces good performance.
- Identifies performance below competitors.
- Supports expenditure decisions.
- Reduces resources with least negative impact.
Ken Boyce is the executive vice president of the Spring Manufacturers Institute.
He brings more than 20 years of association management experience to the institute and has achieved the Certified Association Executive (CAE) designation of the American Society of Association Executives.
Readers may contact him by phone at (630) 495-8588 or fax at (630) 495-8595.
