I once worked for a company whose owner was firmly in the “penny wise, pound foolish” camp. Part of the business involved printing, binding, and shipping manuals (loose-leaf binders full of useful (we hoped) information) to clients. Sending the document electronically to a professional print shop for production and shipping was dismissed as “too expensive”. Instead, a part-time staff member would print the necessary materials on a couple of leased photocopier/printers, manually put the binders together, box them up, print out shipping labels, load the whole mess in a vehicle, drive a half hour to the nearest town with a Purolator outlet, unload, wait in line, process each shipment manually with the staff at the courier outlet, get the invoice, drive the half hour back to the shop (car empty), and process the invoice into the AP system. The time spent was a few hours a week at the prevailing minimum wage.

The cost of having it all done by a commercial printer (including the shipping) was a few cents a page more than the per-page cost of printing in house, but the TOTAL cost of the money saving approach was nearly twice as much as doing it professionally. And, the commercial documents looked better too.

That company saved themselves all the way into bankruptcy.

Working with a supplier that has automated ‘one-click’ systems may cost a bit more per unit, but again, if you need to spend time on the phone to place an order manually or fill out a form to fax (fax?!?! Do people still use those things?), have you really saved anything? Automating the procurement of consumables and putting the responsibility for replenishment as far down the line (ideally in the hands of the supplier themself) will free up management time for more strategically important work.

These sorts of cases abound. By all means, look for ways to reduce costs and eliminate waste, but PLEASE, be smart about it. Don’t save yourself into the poorhouse!