The Cost

A Business Novel to Help Companies Increase Revenues and Profits

Chris Domanski

• Publisher: Business Expert Press
• Year: 2020
• ISBN:
  9781953349354
• Topic: Business
• Subtopic: Operations
• Index: Business

The Cost is for those in the cost engineering field and everyone who is in a manufacturing business: engineers, buyers, sales reps, accountants, operations folks, and business consultants.

The Cost is a story of a cost engineering consultant named Doug Benson who does his best to help companies understand and improve cost. When Doug arrives at Electronica, the company is on a verge of bankruptcy and hardly even knows why. He must use all his cost engineering knowledge and leadership skills amidst some considerable corporate drama all the while fighting his own personal demons in order to give Electronica a chance. The type of situations that he finds himself in are happening all over the world every day and the results are often dramatic with people losing jobs, stakeholders losing millions of dollars, and communities losing hope.

The Cost is not only for those in the cost engineering field. This book is for everyone in a manufacturing business. It is for engineers, buyers, sales reps, accountants, operations folks, and business consultants. This book is also for anyone that is leading a business and has the power to employ cost engineering to make their company successful.

CHAPTER 1

The Problem

Monday, Day 1 of 28

I was invited to join an executive-level meeting the same day I walked into Electronica’s building for the first time. All I knew about Electronica was that it was a medium-sized company headquartered just outside of metro Detroit with factories in the United States, Mexico, China, and Poland. I also knew that there was probably a good reason why I was here. Electronica’s CEO, Bill Rasor, insisted that I attend the meeting and essentially pushed me into the conference room where everyone else was already gathered. My entrance was met with sudden silence and suspicious eyes of about 10 individuals. The sea of designer suits should have made me feel intimated, but this was not my first rodeo. I wore an old tweed suit jacket for this exact purpose. Even though I was only 49 and looked closer to 40 because I exercised and took care of myself, the jacket gave me the look of a tenured professor that took everyone back to their college days and gave a proper measure of intimidation. To put a final touch on it, I had inserted my University of Michigan pin into the lapel of the jacket, which seemed to imply that maybe I was someone important or at least that I had some brains.

“Let’s get right to it, gentlemen,” said Rasor before anyone could introduce themselves to me. He sat in a luxury leather chair at the top of the long mahogany table, and the sea of suits quickly got into their chairs. He was a tall man with a demeanor of a dictator, so it looked like he was sitting at a throne even though he had a table in front of him. There were no chairs left at the table, so I sat in one of the chairs along the wall. If I was not an outsider before, I sure felt like one now.

“So?” continued Rasor. “What is Volta’s response to our last quote?”

A handsome dark-haired man spoke up right away seemingly anxious to grab the spotlight from Rasor. “They don’t think we’re competitive.”

A wave of sighs rose up from the room. The luxury leather chairs started to swing from side to side as people nervously looked around the room. Volta Motors was the largest electric car and truck manufacturer in the world, with over eight million vehicles sold annually, and it seemed Electronica’s future was on the line.

“Damn it!” shouted Rasor. “Why the hell not?”

“Bill,” spoke the handsome man again, “as I said before, our previous quote was thirty percent off Volta’s target and I asked the team here to sharpen their pencils, but our latest quote is still twenty percent too high. I think their target is real, so I can’t sweet talk Volta into giving us the business unless I get better numbers from everyone.”

So, that establishes the corporate culture I will be dealing with; shed the blame and point the finger at everyone else. Not unusual in the high-stakes business like this, but it will make my job more difficult. It will be tough to get the truth out of people. I took out my notebook and wrote down.

“ISSUE #1: Sharpening pencils to get to the numbers”

“What happened, George? I thought you squeezed the cost out of every bucket?” asked Rasor of a nerdy looking man sitting next to him. The man’s body seemed like it would be more comfortable in a laboratory frock than the designer suit he was wearing. Or, maybe he was just not comfortable with the question.

“I did, Bill,” said George, “but our plant won’t budge any further on new investment or processing cost and purchasing said that we can’t squeeze more out of the supplier quotes, so there’s not much more I can do. I already lowered our profit down to six percent. Anything below that would have to go to the board of directors for approval.”

Here we go with some more deflection and finger pointing, I thought. Shit rolls downhill, I wonder who the plants and purchasing are going to blame. My answer came quickly.

“If engineering could design a product that is common with our current products, then I wouldn’t need new machines!” shouted a heavy-set man who probably represented manufacturing.

“Or smaller and less complex parts. I’m already buying at the lowest prices that I can,” said another short man with a Spanish accent, obviously representing purchasing.

“That’s enough!” shouted Rasor before any more fingers can be pointed. “Let me remind you again that if we don’t win this business, we are finished.”

Rasor let the word finished hang in the air before continuing. “We haven’t won any business in two years. Our capacity utilization is down to fifty percent. Our profit is down to two percent. Our cash flow is almost nothing. How long do you think we have before some changes are made around here?” Nobody dared to answer this question. All the heads were hung low avoiding eye contact with Rasor. “I’ll tell you how long. The final round of quotes is due to Volta in four weeks. You have exactly that long to turn this around, because if we don’t win this business, then there’s nothing else and we might as well close the doors.”

Rasor stood up and walked over to the nearby refrigerator built into a small butler’s pantry. The silence hung in the room as he poured himself a ginger ale. He pulled something from the inside pocket of his suit jacket, but he turned his back to everyone, so I could not tell what it was. Whatever it was, he hung it over his glass then put it back into his suit jacket. I guessed it was some sort of fire water, and I could have used some myself as Rasor walked over to me.

“What do you think, Doug?” he said to me. “What is our problem?”

The luxury leather chairs swung toward me, and I felt daggers flying at me from the suits. I was stunned by Rasor’s questions, and so, I just stared at everyone while trying to formulate an appropriate answer. I felt stupid for not having a quick and witty response. Fortunately, Rasor gave me more time by breaking up the awkwa...

Table of contents

• Cover
• Half-Title Page
• Title Page
• Copyright
• Dedication
• Description
• Preface
• Chapter 1 What Is an Entrepreneur?
• Chapter 2 What Do Entrepreneurs Think About?
• Chapter 3 What Is Entrepreneurial Mindset?
• Chapter 4 Identify and Attain Your Goals
• Postface
• Glossary of Terms
• Recommended Literature
• About the Author
• Backcover