In continuation from my column last month I wanted to dig deeper on the topic of focusing on the right levers/drivers inside your business and the potential benefits. Material costs represent one of the largest expense buckets inside a stone fabrication company. The large dollars allocated toward our material costs dictate and warrant our time, effort and focus. A 2 to 3% costs reduction within this category can represent a game changer for most companies. I am going to share a few strategies my leadership team and I drove for years inside my company to reduce material costs.
At one point in time, I can remember we had cut more than 250 different colors of products in one month. This was a problem. Our solution to address the problem was to have a sales program that aligned with the strategic initiative to drive more volume into fewer colors.