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 resources in business is personnel? In fact, hiring staff costs on average 70% of a business’s turnover. Also, staff are never 100% productive. Another area of high cost for businesses is manufacturing. Products can be expensive to make, but if you have not reviewed your designs recently there is a good chance your products could be costing 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 is going to 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 of every day… you are going to get a pretty good return on your investment. But you may be surprised to learn that statistically most staff members are less than 50% efficient. If you factor in 50% productivity the cost per productive hour is closer to £54 an hour… and that’s only if you have enough work to fill the persons 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? Perhaps one of your products needs a lot 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 difficult to predict. If you have a robust planning system you can usually predicts 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 cashflow is tight. If your forecasts are predicting a lean time in the future now is the time to look at 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 it can be difficult for a long established deign team to make changes to their work. An independent design consultant can look at your designs with fresh eyes. They will question what’s important 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 6 or 7-figure return on investment for 4-figure cost? You mat 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 the to the £54 per hour a 50% efficient design engineer costs. Now factor in that White Horse CAD only charge 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. Its easier to pick up the phone and ask for help if you already know who you are going to call. We would love to chat to 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 have a chat with you to discuss future projects or just have a chat about how White Horse CAD could help you, should you need is in the future.
If you would like to have a 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.
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