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Companies are guilty of allowing their employees to send too many packages and envelopes overnight, incurring high freight bill costs that are too expensive. To analyze this, assign one person to overnight packages or envelopes. This will not be the most popular task to be performed, but will reveal a number of people who are wasting the company’s money. Here are some steps that you can try to take to make this program cut freight costs.
Steps to cut overnight charges:
- Announce your freight cost reduction program. Post a notice that overnight freight delivery charges (not paid by customers) are too high and will be routed through one person (assigned name) starting on a specific date with a full analysis to be performed each week. Ask for the help and suggestions of all employees to cut the costs. You might tell the employees to turn in suggestions for cutting down freight costs and $100 will be awarded from those suggestions submitted to the assigned person. (Once everyone begins to see money out there, they will jump on board, conspicuously or not — money is money!)
- Announce the assigned person. Indicate your announcement to all employees that your assigned person is to ask what the overnight package is, who is sending it, what the item is, and why is it being sent so late? The assigned person is the only one allowed to approve overnight freight and is not to deny packages, but to simply report who is sending them, why they are sending them and record the stated reason why the package is late. (With everyone watching you, do you really think the freight guy is going to allow costs to increase as a percentage of sales?)
- Provide weekly cost update. The assigned person will summarize overnight freight costs each week sorted by the sender (spender). Who is spending the most dollars and the stated reasons for the costs? (Do you really think anyone is going to groan if management comes down in favor of cutting costs and joins the bandwagon?) If you simply list the parties who spend the money, you will start saving money without doing anything but publishing a summary. No one wants to be regarded as wasteful, nor do they want their name on the list.
- Managers provide guidelines for cuts. Upper management can decide if some of the reasons for the extra freight costs are unreasonable, too costly, and are worth dropping and using email or snail mail. (Which manager is not going to step up and earn their salary?)
- Track the drop on a freight cost chart. The assigned person will now issue an overnight charges or cost chart on the wall for all to see. (Who in the hell wants to be blamed for that spike on the wall chart?)
Simply drawing regular consistent attention to this cost will drive it down, cause conversation and discussion to occur as to the reasons made, which ultimately force the abusers to cut this practice since no one wants negative attention drawn to their decision making. Your goal is to make it uncomfortable to send anything overnight. This is not bad and only reveals the poorly organized parts of your firm when they delay tasks until the last minute.
