Budget Cuts: 5 Things to Think About

Think about these before cutting your budget

We are asked to meet new goals every year. Sometimes we are given a very large budget for meeting these goals, but other times we are asked make cuts depending on the conditions of the company and the market environment.

When faced with these decisions, it is very important to get it right; otherwise we can shoot ourselves in the foot and suffer the consequences throughout the year. With this in mind, I recommend considering these 5 basic suggestions:

1. Based on your annual planning for the previous year and the current year, compare the results from the previous year and the annual goals for which you are budgeting. Make a list of the resources that helped you accomplish them and which you think were missing.
Now ask yourself this:

Are the resources from the previous year sufficient to achieve the new goals? What resources would you add, increase, reduce, or eliminate?
- For example, a purging compound can mean you achieve the goal of reducing injection downtime.

2. Based on forecasts and new projects, we can detect new needs and how they can be met.

What resources do we already have that we can use? What resources are lacking?
For example, a new hot runner mold with various colors is expected to arrive and will need to be purged to reduce the percentage of polycarbonate waste.

3. Once you have these lists, check whether that resource is something that generates income for the company, prevents a major expense, or is just an expense.

Invest in resources that help increase revenue, increase output, help to retain customers, and add value to the product and service you provide.
Conserve the resources that allow you to prevent waste, whether wasted material, energy or damage to facilities and equipment.
- Purging agents can be used to seal screw/barrel and molds during shutdowns. With some resins, such as PVC and acetal, it is very important for the life of the screw and barrel.
Eliminate things that only cause capital outflow and review the root cause of the problem to prevent leaks.

4. Review your resource supply options; get quotes, request evidence,and document the cost-benefit analysis for your decisions--the latter will help you avoid losing useful tools.

5. As time goes by, check that resources are being used correctly and document this. This is useful for justifying their use and making improvements. Auditing is the name of the game.

Remember: before cutting the use of a material, prevent the failure or breakdown of the system that you have worked so hard to implement. The principle is simple: “Conserve and improve, don't destroy.”

Ready to reduce your production downtime to protect your profits? Learn more about how purging compounds and process efficiency work in tandem.