Operations Payoff

Rick's Blog - your source for news and insights into Operations and Supply Chain Management.

ROT vs. ROI

The ROT (return on time) is often much greater than the ROI (return on investment) when it comes to hiring and improvement initiatives. Many companies wait to start process and productivity improvement initiatives until empty positions are filled. Recently, one client delayed the start of a project until they could get a new production scheduler, which took six months. In another case, a company delayed an operations improvement initiative for almost a year while they searched for a new VP, Operations. These delays cost months or even years of lost benefit.

Hiring Takes Time

Consider this – once you decide you need a person, depending on the level of the position, you begin a search process that can take several months. The new person may need a transition period, especially if they are still at their old job. When they start work and it might take three to six months for them to get their feet on the ground and develop the internal relationships they need in order to be effective. If, heaven forbid, they turn out to be the wrong candidate, you go back to square one. The lost time could amount to months or even years.

The Cost of Doing Nothing

Waiting rarely provides the benefits that quick action can bring, yet most companies overlook the cost of doing nothing. By waiting, things continue as they are now, and solutions and improvements are delayed. This has the potential to cost hundreds of thousands or even millions of dollars in missed opportunities. For some companies, even a few weeks’ head start on the competition can mean dramatic increases in market share, growth and profitability.

Are you measuring the ROT of not taking action? Do you wait for people to be in place before you initiate action? Why not start now and let the new people merge in to the process, like a freeway on-ramp. Speed is of the essence.

© 2015 – Rick Pay – All Rights Reserved

 

 


Leave a Reply

Your email address will not be published. Required fields are marked *