How can an independent design consultant save you money?
- Do you design or make a product?
Do you need more design capacity than your team can support?
- Would you like to employ a design engineer but think you will struggle to keep them busy full time?
- Would it be good if your products cost less to manufacture?
- Do you have an occasional need for 2D or 3D CAD support?
If you answered yes to any of the questions above, read on
Where does all the money go?
100% of the business owners, directors, and managers we spoke to would like to increase their profitability. Who wouldn’t? Did you know that the most expensive resource in business is the personnel? Hiring staff costs, on average 70% of a business’s turnover. Also, staff are never 100% productive. Manufacturing is another area of high cost for companies. Products can be expensive to make, but if you have not reviewed your designs recently, there is a good chance your products could cost you more than they need to.
A reasonable design engineer commands a salary of around £35k per year. But their salary is just the tip of the iceberg. There is also the cost of hiring, employer NI contributions, holiday pay, sickness pay, and any other benefits you may offer to attract the highest quality staff. The total cost of employing anyone is around 150% of their salary. So, this design engineer will cost your business at least £52.5k a year. Or, if you break it down, around £27 an hour.
If you can keep this design engineer busy every hour, you will get a pretty good return on your investment. But you may be surprised to learn that most staff members are less than 50% efficient statistically. If you factor in 50% productivity, the cost per productive hour is closer to £54 an hour, and that’s if you have enough work to fill the person’s day.
Sometimes design teams get busy! When this happens, it’s tempting to take on more staff. But what if this busy period is just a blip? Perhaps it’s a seasonal anomaly? Maybe one of your products needs much more support while some issues are worked through. If your design team usually manages to keep on top of things, it would be better to support the team you have rather than add to their numbers.
These busy times can be challenging to predict. If you have a robust planning system, you can usually predict seasonal fluctuations. But what happens when the unexpected happens? Do you pile the pressure on your already busy design team? Or do you look to outsource some work to a sub-contractor?
When the going gets tough
Running a business can be tough sometimes, especially when cash flow is tight. If your forecasts predict a lean time in the future, now is the time to consider cost reduction. You don’t need to reduce the size of your team or cut spending to save money. If you sell a product you make (or have made for you), a cost reduction exercise could save you money (thousands of pounds month on month, year on year). The problem is that it can be difficult for an extended established design team to change their work. An independent design consultant can look at your designs with fresh eyes. They will question what’s essential and suggest new manufacturing techniques that could reduce your operating costs significantly. White Horse CAD recently worked on a cost reduction exercise where a client enjoyed a projected return on investment of over 3900% in the first year alone. How often do you get a chance to make a six or 7-figure return on investment for a 4-figure cost? You may think this is an extreme example, but most businesses can benefit from an independent design review.
White Horse CAD’s standard charge-out rate is £40 per hour (+VAT). Compare this to the £54 per hour, a 50% efficient design engineer costs. Now factor in that White Horse CAD only charges you for the time we work on a project. From a client’s perspective, this makes White Horse CAD 100% efficient.
Get to know us
The best time to plan for the tough times is when things are running smoothly. It’s easier to pick up the phone and ask for help if you already know who you will call. We would love to chat with you about how we can save you money, even if you do not have an immediate requirement for our services.
Having a meeting before you have a need is ALWAYS worthwhile for both parties. We would love to chat with you to discuss future projects or just talk about how White Horse CAD could help you, should you need it in the future.
If you would like to chat about how White Horse CAD could help you in your hour of need, call us on 01373 801 803 or use our contact form to send us an email.
Get the latest blog posts direct to your inbox … sign up here…