Learning more about ROI, and how we can contribute to this

PAGSASANAY SA TAGUMPAY

Rizal Philippines
April 9, 2017

Peter Drucker says, that one of the 5 things we must do is to focus on results.  One such result is ROI
The others are sales and expenses.  How many are focusing on results?  On sales. For many intrigues, stories are more important, or having factions are more important.  Well our feelings are important.   But that is not the goal why we are here.   We are to be judged as to whether we achieve the results assigned to us.  That is what important at the end of the day.

Larry Bossidy on the other hand, in Strategic Execution, he tells us to set clear goals and standards.  We are judged on the basis of our outputs, outcome,  and not on our weakness.  The weakness is about our group dynamics, or things that are unpleasant to us.  Or to which is object because let us say they impinge our our liberties and discipline, but which should be important or strength of the business

Let us read more and increase our understanding of what business is all about

A PDCA follows the template of an ROI to learn more about the cost benefit of a project/proposal.  Without ROI, the business will just wither and die.   Every one must understand and live by this. We cant continue forever having expenses or returns.   We have responsibility towards any type of funds or investment that we get

Growing the seeds of business and ROI

Efficiency and ROI for everyone

TO    :   EPR, CC

Subject:    Combining  Agents and HGMP employees parties

We have reduced the cash advance for Christmas parties because the Agents and Staff parties could be combined.  One preparation and one event and it is a happier occasion.  Why have two when we can have one?

Let us have this kind of mindset, ie to make the company save money.

Money saved is money earned.  It is reverse marketing.

Right now, I have received report that two SBU bled a lot of losses, and are drowning in red ink. They cant qualify for NSS.  They must strive harder.  They must start from within

FYI

JUS

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RRURAC:    Read, Respond, Understand, Reflect, Apply and Check

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Cost and expense reduction

Today, we discussed cost  with Rezhelle, EB, and Melanie cost reduction

1.  Cost refers to the expenditures, that goes to the manufacture, and making of the product;  expenses get out of the working capital cycle;  Once spent, they are gone.

     Thus labor, electricity in a manufacturing plant is cost;   electricity for offices not involved in manufacturing is expense

2.  There  are two major ways of cost/expense reduction:

      1.  Eliminate the item entirely.  The item will be not be ordered, reimbursed.  Sometimes, the cost of controlling an expenditure is greater than the cost being controlled.  Thus DIY shops and self service resto are attempts to eliminate cost of restaurant service.  Water is not served when not ordered.

         In budget airlines there are no inflight service like snacks or newspapers

     

      2.  Reduce:

           1.  Automation  -  computerization, automatic switch off device; computer devices to reduce unit cost per transaction. Thus bar code, MICR in checks reduces cost processing.  Factories use machines to assemble products, reducing cost of reworks, labor wages and benefits.

          2.  Methods -  cost reduction methods;  how to save with manuals, team building, training, Kaizen, TPM etc.

         3.  New technology FFE  -  we use more energy efficient aircon, light bulbs, refs, and other appliances.  There are aircon and refs with higher EER from Bureau of Standards.   LED lamps consume 80% less power.

Solar aircon use 40% less electricity;  inverter aircon use 30% less power.

          Solar panel reduce home electricity consumption by 30%.  operating cost is zero. Thus in Calamba we bought solar panels to reduce energy consumption. 

3.  Why we are buying new LED lamps:

    1.  LED bulbs      9 watts    vs.      20 watts CFL  savings of 11 watts or 55%

    2.  LED street lamps   120 watts with 13,500 lumens vs.  450 Metal Halide or 73% savings.

Cost benefit analysis:  

1.  LED light bulbs cap ex is P589.00 vs CFL 120.00 php ( 11 hours a day usage for 30 days)

Savings:   11 watts x  11 hours x 30 days  =  3.63 kwh per month x 13  = P47.19 

ROI -  12.48 months ( slightly over one year)  = 100% ROI

2. LED street lamps:

Metal Halide cost  450 watts - P3,500

LED 120 watts, 13,000 luments -  P17,000.00

Assumption 1  4 hours of usage:

450 - 120 watts =  330 watts x 4 hours x 30 days  = 39.6 kw x 13/kwh = P514.80

P17,000/514.80   = 33 months.  =  26%

Assumption 2   =  6 hours of usage

330 x 6 x 30 x 13 php/kwh    =   P772.00 savings per month

 ROI P17,000/772.00   = 22 months

Thus it makes a great sense in investing in  energy savings devices

CONFIDENTIALITY NOTICE/disclaimer:   The information contained herein is strictly confidential in nature and is the property of Holy Gardens Group and intended only for the intended recipient and its  retransmittal , reuse,reprinting or taking action other than the intended party is strictly prohibited. Holy Gardens assume no responsibility liability arising from such unauthorized use.

RRURAC:    Read, Respond, Understand, Reflect, Apply and Check