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Complexity needs a System
15. November 2018 @ 9:00 - 17:00
Story of Example: Analytical Planning “inefficiency”
The following transpired during a Budget several years ago.
During the type of costs analysis we always work with the Pareto principle and analyze the costs according to the principle 80 to 20. This means if we have 100 types of costs, 20 types of costs are 80% of the costs. We were faced with the same situation in this company, whereby the type of cost ‘water’ was at the 18th place and accounted for a significant part of the costs.
The controller of the company decided not to deal with the ‘water’ issue As an argument he presented to me the last five balance sheets, each of WHICH showed the expenses for ‘water’ to be in the same amount.
Now my question was, why do we need the type of cost ‘water’?
During the course of the analytical planning we found that water was required to be used for work process. After detailed investigations we found that during maximum load and operating performance of the machines and all periods water consumption amounted approximately to one half of the costs. The search now began for the second half of the water consumption. We searched for water consumption within the whole company, such as water for coffee, washing hands, showers of employees, etc., etc.
Based on the fact that we could not find how the second half was used, we decided to read the water meter on Friday and again on Monday morning. It turned out that the meter kept running even though the plant was shut down.
A leak had developed behind the water meter and the water seeped into the ground.
If you buy water = drinking water it costs approx. 1eur and waste water = approx. 2,20 eur depending on your location. Vienna has different prices than the ski resort town Schladming. Based on our experience a laundry can save about 30% on waste water. This figures have been already used by us in laundry company saving up to 30% waste water.