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Looking For Ways To Charge Less

October 2, 2014 Christian Frueh Topics: Leadership Playing Not To Lose

looking for ways to charge less

Second Value: Do more for less.

Jeff Bezos once said there are two kinds of companies, those that work to try to charge more and those that work to charge less. One of our core values is “do more for less” so it goes without saying we think of ourselves as the kind of company that works to try to charge less.

Indeed, there are few things I personally look forward to more than being able to tell a customer that, through our collective efforts, we were able to take cost out of a part and pass along a price decrease.

In looking for ways to charge less, the challenge for Evaero has been to accomplish this goal in a manner that is consistent with our mission and values.  As such, things like moving our work to another country solely to save money on labor, working with metal working fluids that are harmful to our employees or the environment, skirting overtime laws, improperly discarding hazardous waste, hiring employees at the current minimum wage, reducing tax liabilities by dubious means, and not providing a safe work environment, are all examples of things we cannot consider when trying to come up with ways to reduce or contain our operating costs (and in turn our prices).

The effect of this is that many of the projects we elect to pursue are systemic in nature and as such tend to take some time to positively impact our bottom line.

A simple example I thought of today: When I first started working for Evaero, payroll took one day to process. Today, even though we have nearly twice as many people working for us, payroll takes only one hour. Investing in new technology definitely helped with the improvements but buy-in and engagement from all of our employees played an even bigger role.

The purchase was fast..the buy-in, not so much. Although it took nearly a year to fully realize the positive impact of the changes, today our company and customers benefit not only from the direct savings but also from the time we free up to do other more valuable things.

In choosing to take the long road to productivity improvements we accept the fact that our customers, pressured for cost savings, might go elsewhere in a world where someone is always willing to do something for less. Last year for example we lost an existing contract when another company agreed to make a part we had been delivering without fail for 10% less.

Although nobody likes losing business, such events serve as a stark reminder that doing more for less isn’t just a value: It’s a painful condition of Evaero’s existence.

– xian

Photo Credit: DaveBleasdale via Compfight cc

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About Christian Frueh

With a Ph.D in Materials Science and Engineering and a minor in Anthropology, Christian is a thoughtful leader who looks at things from a scientific perspective: Solve problems, don’t make assumptions.

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Evaero is a modern manufacturing firm delivering custom machined components to the aerospace and defense industry.

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Tucson, AZ 85716

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