The Sunk-Cost Fallacy: The justification of increased investment of money or effort in a decision, based on the cumulative prior investment (“sunk cost”) despite new evidence suggesting that the future cost of continuing the behavior outweighs the expected benefit.

“Throwing good money after bad.”

“It’s never the wrong time to make the right decision.”

“If you find yourself in a hole, stop digging.”

Connecticut State College and Universities President Mark Ojakian and the Board of Regents are spending money like crazy.

They will need to spend a lot more in the coming year.

Things are going so badly for “Students First” that the BOR is now paying (bribing?) faculty with large cash bonuses to work on this project. This is in response to votes this spring from the governing bodies of all 12 community colleges to cease work on “Students First.”

We are in the midst of a pandemic. We have tremendous needs for faculty development, advising, and teaching positions at community colleges across the state.

Rather than saving money, “Students First” is now actually turning out to be one of the most expensive bad ideas in Connecticut higher education history.

The BOR budget has ballooned by over $16 million dollars under this plan.

Will “Students First” ever save any money? Although President Ojakian and the BOR claim it will, the numbers simply don’t add up, as anyone can see.

Nonetheless, as William James famously observed, “There’s nothing so absurd that if you repeat it often enough, people will believe it.”

A new organizational plan has been unveiled for the new consolidated community college that will require hiring many more expensive administrators—not the teachers and advisors students need.

This hiring is in addition to the three new regional presidents and the system president, and the new interim provost, interim CFO, and three associate vice presidents—all newly-created positions.

Where is all this money coming from? Is there any limit to the amount of money the BOR can spend?

And what will happen when the BOR comes looking for more money in the months ahead to fill these many new administrative positions?

If you gave anyone that kind of money, they could “save” community colleges,  too —without all the hassle, conflict, and votes of no confidence from community college academic governing bodies across the state.

Unfortunately, this is the world of Connecticut politics, where common sense and evidence don’t seem to have a place in decision-making.

As a political endeavor, this has been conducted masterfully by President Ojakian and the BOR. We have been very impressed with the way the political aspects of “Students First” have been handled. This is a textbook example of power politics at its finest.

Unfortunately, this is not a political issue— it’s a social justice issue. The public institutions in Connecticut that do the most for those who have the least are now being systematically dismantled and defunded.

Community colleges serve many underrepresented and first generation students —and many students who struggle financially and academically. Community colleges give students hope, opportunity, and a stepping-stone that isn’t available to them at most universities.

Community colleges also bring people and communities together.

During these troubled times, we need to do everything we can to strengthen these essential public institutions.

The business community has a phrase for what is happening right now to Connecticut community colleges: “hostile takeover.”

Surely, something must be amiss if all 12 community college faculty and staff governing bodies voted this spring to cease participating in “Students First” work.

The draft of the “One College” CSCC Organizational Chart released on May 15 makes a number of things very clear:

1. “Students First” Consolidation is hurting students right now.

2. “Students First” Consolidation will continue to drain valuable resources away from our current students and our colleges.

3. “Students First” Consolidation is now adding layers upon layers of unnecessary, expensive, wasteful management positions at the “College Level,” the “Regional Level,” and the “System Level.”

4. “Students First” Consolidation centralizes decision-making and removes decision-making from faculty, staff, and administration.

5. “Students First” Consolidation is an attempt to weaken the voices of staff and faculty, and it is an attempt to weaken the voice of the unions.

Legislators, are you going to continue to co-enable and preside over this incredibly expensive bad idea?

 

Sandra Barnes, Housatonic Community College
Dennis J. Bogusky, President, Federation of Technical College Teachers, AFT #1942
Dr. John S. Christie, Capital Community College
Dr. Francis Coan, Faculty Advisory Committee Representative, Tunxis Community College
Saulo Colon, Housatonic Community College
Terrence Delaney, Three Rivers Community College
Dr. Lauren Doninger, Gateway Community College
Seth Freeman, Capital Community College
Dr. Diba Khan-Bureau, Three Rivers Community College
Kevin Lamkins, Capital Community College
Joan M. Lloyd, Housatonic Community College
Ron Picard, Naugatuck Valley Community College
Minati Roychoudhuri, Capital Community College
Teresa M. Russo, Gateway Community College
Colena Sesanker, Vice Chair of the Faculty Advisory Committee to the BOR, Gateway Community College
Patrick Sullivan, Manchester Community College
Dr. Carmen Yiamouyiannis, Capital Community College
Robbin Zella, Housatonic Community College

I recently attempted a no-spend month challenge. However, I didn’t succeed because I made several money planning mistakes. I considered trying it again for June. Then I changed my mind. Instead of doing a no-spend month, I’m trying something different. I’m using a weekly savings plan to improve my budget. This seems like a more practical approach for me given my current financial state.

What is a Weekly Savings Plan?

I should note that a weekly savings plan is very different from a no-spend challenge. However, in both instances, the point is to save money.

My goal with the no-spend challenge was essentially to spend as little as possible. Therefore, I would save as much as possible.

Similarly, a weekly savings plan is all about saving money each week. However, it may or may not be about “saving as much as possible.” Rather, it’s about setting a weekly savings goal and sticking to it.

This allows for more wiggle room than the no-spend challenge. After all, if I have $500 left at the end of the week, after paying bills, then with a no-spend challenge I wouldn’t spend any of that. If I’ve set a weekly savings goal of $300, I would have $200 left for spending. If it’s a struggle to not spend any money at all, that extra spending money can make things easier.

Benefits of a Weekly Savings Plan

Obviously, then, the benefit of a weekly savings plan as compared o a no-spend challenge is that you can still spend some money. Not having any frivolity throughout the course of an entire month can be daunting. It’s easy to fall off that horse, as I did last month.

In contrast, a weekly savings plan is a positive goal. “I’m trying to save this much” vs. “I’m not allowed to spend.” The positive twist makes it feel more doable. It is easier to stick with.

Of course, this would be true of any savings plan that’s framed as a goal. So what specifically makes the weekly savings plan a great idea? What’s most true for me, particularly as a freelancer, and particularly during pandemic time, is that it’s a very short-term goal that keeps resetting at the start of each new week. This is great because:

• I don’t currently know exactly what I’m going to earn each month. Between changing jobs and clients making late payments due to their own COVID hardships, my income just isn’t clear. It’s a lot easier to see what I made last week or even to predict what I’ll make next week than it is to look at the entire month ahead. Therefore, a weekly savings plan makes a lot of sense right now.
• I only have to meet a one week goal. Therefore, the actual amount of savings could be tiny. It’s doable. And yet, it adds up. I get to save money for an emergency without feeling the pinch of setting aside too much at one time.
• If I fall off course, I can easily reset the following week. Once I fell off course with my no-spend month, it felt like, “well, that didn’t work” and I kind of gave up. But this plan resets every single week. Hopefully I’ll save the money each week. However, if I don’t, I can start again the next Monday.
• The weekly reset also means that I can consistently recalibrate my goal. If it turns out that I’m not realistically able to save as much as I thought, I can review my budget. I can see where to make changes. And, if I’m lucky, and it turns out that I could save even more, then I can make a new plan in that direction as well.

How to Create a Weekly Savings Plan

So, does this sound good to you? Great. But how do you do it? Here’s my approach:

Where Do You Want to Put Your Savings?

What savings accounts do you already use? Is this where you want to put your money? I have two major savings accounts: one small one trough my regular bank and another high-interest savings account through WealthFront. I intend to put my weekly savings into the WealthFront account. But do what works for you, depending on how easily you do (or don’t) want to be able to access your savings.

Where Can You Pull Money From?

Before asking yourself how much you want to save each week, first ask: where could I stop spending? I combed through all of my subscriptions and spending habits to discover where it would be extra easy to cut back. For example, I was paying $19.99 per month for Lyft Pink. However, under quarantine, I’m not using Lyft as much. So, I can easily pause that account. Instead of spending that money elsewhere, I can put approximately $5 per week into my savings account.

Check to see if you can cancel the following things and redirect that money to savings:

• Delivery service subscriptions including those associated with Amazon and Postmates
• Streaming TV services such as Hulu or Netflix
• Other monthly streaming services such as Audible or iTunes
• Gym and spa memberships, especially if you aren’t attending during shelter-in-place
• Online storage systems that you might not be using such as Dropbox or Google Drive

Similarly, it’s a great time to review where you might be able to reduce spending. For example, have you checked for discounts on your phone bill or cable bill recently? If you can save $10 or $20 per month, that’s money that can go into your weekly savings plan.

In other words, look at every single monthly subscription that you pay for. Cut out what you can. Divide the number you were paying monthly by four and add that to what you put into weekly savings.

Automate Your Weekly Savings Plan

As long as you aren’t on the brink of running out of money in your checking account, I highly recommend automating your savings. Once you’ve figured out how much you can save each week, set it up so that your checking account automatically transfers that amount weekly into savings. For example, if you can save $20 per week, change your account settings to automatically transfer $20 from checking to savings every Monday.

Do a Weekly Review

This part really helps. At the end of each week, review your money. Did you earn what you expected? Did you spend what you expected? As a result, did you save what you expected? If you have to adjust your weekly savings plan accordingly, do so.

Most importantly, check if you have any more money at the end of the week than you anticipated. If you do, set aside a portion of that as bonus savings for the week. You might want to create a rule. For example, “I will add 10% of any extra money for the week to my savings account.”

Can You Earn More In Order to Save More?

Whenever you create a savings plan, it’s important to also look at where you might earn more income. What could you do this week in order to have more money next week? Could you do a quick freelance gig? Maybe you could declutter and sell some items? You might put all of your extra income into your savings. Alternatively, you might put a percentage of what you earn aside each week.

Other Weekly Savings Plan Ideas

My approach is only one way to do a weekly savings plan. Here are a few other options:

• Set a specific savings goal for the year, quarter, or month. Then divide that accordingly to figure out what your target weekly savings goal is. Plan your budget to accommodate this goal. This is especially helpful if you’re saving up for something specific such as a wedding or a vacation.
• Try an incremental weekly savings plan. Save $5 in week one. Save $10 in week two. Then, save $2o in week three. You can keep adding it up throughout the year. Alternatively, you can start over at the beginning of each month. This is a low-key way to challenge yourself to save more. There are many variations on this. Check out the 26-week savings challenge and the bi-weekly savings challenge as two examples. The Daily Nickel Challenge is yet another variation on this.
• You can also do the reverse of the incremental plan. You can start by setting aside a higher amount each week for one month and then a little bit less per week the following month. Here’s an example of this kind of plan.
• Use a physical calendar to mark down what you get paid and what you “owe” yourself each week for savings. Here’s more info on that.

Do you prefer to budget by the week, the month, or the quarter? Why does it work for you?

State regulatory staff recently recommended that utilities offer discounts for charging vehicles during off-peak hours.

New Hampshire regulators are considering whether and how utilities should offer discounts to electric vehicle drivers to charge during off-peak hours.

So called time-of-use rates have potential to reduce peak demand and delay expensive upgrades in electric grid capacity. Supporters say rolling them out for electric vehicles could be a good way to introduce the rates and their money-saving potential to more New Hampshire utility customers. 

New Hampshire Public Utilities Commission staff recently endorsed the concept as part of a docket on rate design related to electric vehicles. Stakeholders generally support the idea, but questions remain about how to administer the rates. Some also think the option shouldn’t be limited to electric vehicles.

Time-of-use rates charge customers different rates at different times of the day. So rather than paying one flat rate, they might have three different prices for power depending on the hour. The goal is to relieve grid load, by enticing customers to shift electricity use to times when there is less demand.

“I think that the beginning of the age of electric vehicles is not just potentially great for transportation but also great for electricity, because it sort of cracks open the door for time-of-use rates,” said D. Maurice Kreis, the state’s consumer advocate.

Eversource, New Hampshire’s biggest electric utility, has a time-of-use tariff, but it’s not widely promoted, Kreis said. While these rates often have three tiers — one rate for off-peak hours, a higher rate for peak, and an even higher one for “super peak” — Eversource’s only has two.

Eversource’s time-of-use rate also doesn’t do a good job of encouraging customers to reduce their consumption when grid load is highest, said Madeleine Mineau, executive director of Clean Energy New Hampshire.

“I think there is a lot of interest” in these rates, Mineau said. Interest is growing particularly because of a project by Liberty Utilities, another regulated utility in New Hampshire. In that pilot, customers who install batteries at their homes to store electricity are enrolled in time-of-use rates.

“The average ratepayer probably has never heard of a time-of-use rate,” Mineau said. So implementing it for electric vehicle drivers could be an effective way of spreading the word: If someone hears their neighbor is trying it out, they might become interested.

Once the rate is developed for electric vehicle drivers, Mineau said, there’s no reason it shouldn’t be available for all customers. A program that’s open for people to enroll in, without being mandatory, would allow the utility to evaluate the effectiveness of the new rates.

Mineau also noted that a widespread rollout of time-of-use rates would require upgrades to customers’ electric meters, from traditional analog meters to advanced metering infrastructure, or “smart meters.” Unitil, New Hampshire’s third investor-owned utility, has upgraded, but Eversource and Liberty, which cover the vast majority of the state’s customers, haven’t. How meter upgrade costs are covered, whether in the rate base or from individual customers who opt in to the program, would have to be discussed, she said.

Although commission staff recommended that electric vehicle drivers be allowed to adopt the new rate just for their car, this raises a question over how to measure that use separate from the rest of the home. Traditionally, it would have required a separate meter to measure electricity from the customer’s charger. If the utility owns that meter, it brings in revenue, but it can also hike customer bills.

Chargers now often have their own embedded technology that can measure electricity use. ChargePoint, a developer whose chargers offer this capability, submitted comments noting this. Both Mineau and Kreis said it’s reasonable and beneficial for customers to make use of these alternatives.

Commission staff recommended utilities be required to conduct feasibility studies to determine how electric vehicle-specific rates can be offered with devices other than utility-owned meters. Even if utilities determine these alternatives aren’t feasible now, they’d have to describe the barriers to implementing them and how those barriers can be eliminated.

Eversource disputed the use of third-party technology. Utility officials said in comments that alternative data sources would lead to inconsistency in data collection and to “potential challenges with respect to oversight, jurisdiction and dispute resolution around third-party metering.”

According to Kaitlyn Woods, a spokesperson for Eversource, the company is able to guarantee accurate billing and effective service when it owns the meters. “With end-to-end usage insight, we are able to inform, guide and alert our customers to usage, pricing and billing changes over time,” Woods wrote in an email. “Additionally, as cyber threats continue to be a concern in the energy space, we believe that up-to-date protocols on a time-of-use or other form of metering, utility ownership and regulatory oversight are essential to ensure information integrity, security and consumer protection.”

Rick Russman, a former state senator and a member of Clean Energy New Hampshire who submitted comments, supports time-of-use rates. His family owns two electric cars, but he said he’d be open to these rates whether they were electric vehicle drivers or not. One way he might capitalize on them, he said, would be to buy a Tesla Powerwall (a home battery), charge it overnight when prices are low, then use that for his electricity needs during the day.

He even bought a share of Unitil stock so he could go to last year’s shareholder meeting and make a case for the new rates. “It certainly isn’t rocket science,” he said, “it’s good for everybody.” Not only can the rates save customers money, he said, but by relieving load for utilities, those companies can also save.

Russman acknowledged that he’s more active in energy issues than most customers are. So, he said, utilities should make significant efforts to advertise new rates to customers. Customers hear from utilities every month when they get their bill, so that’s a great opportunity to reach them, he said.

“People want to feel like they’re part of the solution,” Russman said, noting how time-of-use rates can benefit the grid. “So why not empower people by trying to point to what can be done here.”

Now that staff have made recommendations and stakeholders have commented, the commission will hold a hearing in late June (it will take place online) for stakeholders to testify. After that, the commission will issue a directive that may involve utilities proposing new rate offerings.

Profits for your company can rocket upward if you achieve sufficient savings in supply chain costs. It’s not uncommon for a concerted effort to yield annual savings of between US $2 million and $10 million, depending on the size of the company.

To achieve that degree of savings, though, you have to know where to look. As this article will discuss, there are seven areas that consistently offer opportunities for supply chain cost savings for businesses of all sizes and across all industries. Because these seven opportunities apply to almost every aspect of supply chain management, you can be systematic in your approach to improvement. This is important given the broad scope of the supply chain, which extends beyond your company to include both suppliers and customers. A systematic approach also is important because of the variable requirements supply chain managers must manage: big volume and small volume; large orders and small orders; frequent and less frequent deliveries; special handling needs; temperature control; city and country locations … and the list goes on.

Before you look at opportunities for supply chain cost savings, though, consider this: The scope and variability of supply chain activities means that anybody who is in business to make a profit needs to understand the “cost to serve” for the different types of customers and the different types of products and services your company provides to them. Here are just three examples that show how the supply chain cost to serve customers varies depending on the type of business:

Cement. Delivery of building products, particularly to building sites, is complex. Very often delivery times must be precise, as workers and equipment are booked for a specific time period to handle the delivery.

Supermarkets. Constraints often exist not only for delivery time, but also for the configuration of the product. Many supermarkets demand only one product per pallet.

Home delivery. Distribution is potentially complex and costly, not only because the order size and value can be quite low (and so the cost for distribution as a percentage of sales is high), but also because the customer is often not at home. This leads to redelivery and even more cost.

As the variability seen in these examples suggests, it is paramount that you first understand the dynamics of your customer base so that you can design your service offering to meet their needs at a sensible cost. If you fail to identify customer needs correctly, you will supply the wrong service at the wrong cost. The danger is, then, that your customers will leave you or you will go bankrupt—or both.

With a systematic approach and an understanding of your cost to serve in mind, let’s consider the seven areas that consistently offer opportunities for cost savings for every company, no matter how big or small.

1. Customer service
Give customers what they really want, not just what you think they want.

Your customers? requirements should shape your supply chain strategy and structure. It?s a straightforward application of marketing principles: provide customers with what they need and avoid adding costs for things for which they see no value. Although this sounds simple, real-life examples of companies that get it back-to-front are numerous. Here are some that I have observed.

Example 1: One company provided next-day delivery to all of its customers—even though not every customer needed or wanted it. The company was wasting money on express transport by “overservicing” some of its accounts.

Example 2: “On Monday we deliver to the North, on Tuesday we deliver to the West, on Wednesday we deliver to the East, on Thursday we deliver to the South … and on Friday we do emergency deliveries!” The auto products distributor that followed this practice had no customer service policy or discipline, and it sacrificed customer satisfaction for its own ease of transport planning.

Example 3: To pacify customers calling in with complaints, a distributor gave them free delivery. The loss of revenue for the distributor over the course of a year came to US $500,000. Both the distributor and its customers would have been better off if the distributor had eliminated the complaints by ensuring that the underlying problems did not happen again.

It’s important to remember that when customers see value in a particular level of service, they will expect to pay for it—indeed, they will be happy to pay for it when it helps them to run their own businesses better. Make sure the whole of your organization understands this, so that the benefits of aligning customer service to customer requirements can be achieved: more sales, more profits, and more customer loyalty.

2. Supply chain strategy
Objectives should drive strategy, and strategy should drive tactics—not the reverse.

Once you have a clear understanding of your customers’ needs, you can move on to defining a supply chain strategy that will achieve your business objectives while delivering on your customer service promise.

If you?re wondering whether your own company has taken the right approach, then ask yourself if any of the following problems have been occurring:

• You have no documented or generally understood supply chain strategy.
• Your company thinks of ?supply chain? as being restricted to one or two functional departments (for example, purchasing and manufacturing) instead of involving the company in general (including logistics, marketing, sales, research and development, and so on).
• There is internal and external customer dissatisfaction relative to costs and services.
• Many supply chain projects are managed in ?silos,? meaning individual functional departments.

A supply chain strategy is a living thing. It must be adaptable and change to meet evolving business and customer needs, and it needs to be flexible enough (or at least encourage sufficient flexibility) to drive optimal tactical and operational decisions. Yet whatever phase it is in, a supply chain strategy also needs to be clear and precise. If it is, then you can immediately decide whether to take a particular action by asking yourself, ?does this fit with our strategic imperatives??

When your strategic imperatives are correctly defined and your tactics and operations fit these imperatives, then you avoid wasting money on actions that do not make a relevant contribution to your bottom line.

3. Sales and operations planning (SOP)
Get your process right first, and define your systems after.

SOP is a process that shares information and brings people together in a structured, single plan that is defined across the functional departments. People often confuse SOP with complex, expensive software tools, but the process comes first, not the system. If you haven?t thought out your process properly, then even the most expensive software in the world won?t save you.

SOP is a straightforward concept but it is not an easy one to carry out. Signs that you might have a problem with your SOP process include:

• High levels of ?SLOB? (SLow moving OBsolete) stock
• Frequent changes to your demand plan and master production schedule
• Wild proliferation of SKUs (stock-keeping units)
• Excessive stockouts
• Poor forecast accuracy—or no forecasting at all

Improving the situation can sometimes be surprisingly simple. For one auto parts distributor, for example, a small change in its forecasting algorithm turned out to be a major step forward, even though it was still using a plethora of spreadsheets to predict demand for more than 20,000 stock-keeping units (SKUs).

For other companies, the solution may be more complex, starting with developing longer-term planning horizons, categorizing products by sales volume, and setting up ?time fences? for production (rolling deadlines to determine whether changes can still be made to sales forecasts or if the purchasing and production plans can no longer be altered).

What kind of cost-related benefits can you expect when you achieve success with your SOP process? The benefits include improved availability and stock turns; less ?fire-fighting? and expediting; and, of course, improved sales and profits.

4. Supply chain network design
Keep costs down and reliability up by designing your network to minimize product handling.

Think of the shape of your physical supply chain network as being determined by two ?bookends?: your customers and your suppliers. Your customer base and the service you provide to them on one end and the location of your suppliers on the other dictate where you hold stock to service your customers. The more unreliable the network—because of suppliers being farther away, for example—the more stock needs to be held in your network to ensure service continuity.

But that?s something you want to avoid, because one of the most important requirements for an efficient and cost-effective distribution network is to minimize product handling. Each ?touch? between the point of supply and the customer incurs cost and increases the risk of error and damage. Inadequate network design can lead to excessive handling, too many stock locations, and poor utilization of your distribution centers. The results are high distribution costs and poor customer service.

The blueprint for achieving a design that minimizes ?touches? while meeting your service commitments can be succinctly outlined this way:

1. Establish customer service offers (your first
   ?bookend?)
   1. Customer locations and lead time
   2. Service expectations
2. Establish supply points/lead times (your other ?bookend?)
3. Identify current network performance
   1. Facility costs
   2. Inventory costs
   3. Transport costs (inbound and outbound)
   4. Service performance
4. Test and quantify alternatives for least-cost networks
5. Consider network transformation, if the benefit will be large enough

To achieve even the simplest revision of a supply chain network requires network modeling software and careful analysis. Appropriate analytical tools will allow you to test a wide range of cost and service options to ensure that you use optimal networks and that sensitivities such as demand increases, fuel cost increases, or changes to the customer service offer are checked.

5. Outsourcing
Both parties can benefit from a healthy and proactive partnership.

Eighty-five percent or more of businesses outsource some part of their supply chain operation or management. The two functions that are outsourced most often are warehousing and transport. A common reason for this is that management believes the company will save money by outsourcing. This is not always the case, of course, but cost savings can come about if the service provider is more efficient or skilled in performing the required services than the company is.

Besides saving money, other reasons include:

• The service being outsourced is not core to the business and a ?distraction? for management.
• Operations are rapidly expanding, and outsourcing provides an effective means of quickly accessing more space, technology, or other resources.
• The business requires a degree of flexibility in resourcing and a more variable cost structure, either in resource numbers or type.
• The business needs access to specialized skills, equipment, or technology and does not want to invest in those assets directly.

The most important element to get right is the service specification, which includes elements such as frequency and volume of delivery, any special conditions such as packaging, handling, and temperature control, and so on. The initial step of defining this service specification is typically enough to avoid the majority of outsourcing issues, such as higher-than-expected costs, poor service, or misaligned expectations.

A successful outsourcing relationship is characterized by both parties getting what they want through a healthy and proactive partnership. As the customer, you get consistent service at a cost within expectations (and the possibility of a lower cost overall), and your service provider makes the expected profit margins.

6. Asset utilization
Get more productivity out of fewer assets.

As a general rule, the more assets you can use within any 24-hour period, the better. Underutilized assets, such as vehicle fleets, facilities, or inventory, mean inefficiency and poor return on investment. Changing the way assets are used or whether they are owned or leased can resolve these issues, as the following examples show:

• Instead of making early-morning deliveries and leaving their truck fleets idle for the rest of the day, some bakeries use fewer trucks and spread their deliveries out during the course of the day. Supermarkets get periodic ?top-ups,? food-service businesses can get deliveries later in the day, and some customers may be willing to take deliveries in the evening.
• A major retailer outsourced its delivery fleet, which delivered merchandise from its distribution centers to its stores. The original rate structure was a ?truck rate?: for each vehicle that performed deliveries, a flat fee was paid regardless of how full it was. This hardly encouraged the transport company to utilize the fleet efficiently. Now the rate has been changed to a pallet rate; fleet efficiency has gone up and costs to the retailer have gone down.
• A very large beverage manufacturer experiences a peak in business at Christmastime. Providing sufficient warehouse capacity to accommodate this peak within its own network would mean very low space utilization at other times of the year. During the build-up to Christmas, therefore, it rents additional warehousing capacity to handle the seasonal peak. It only pays for the extra capacity it needs for a month or two, rather than for the whole year.

7. Performance Measurement
Measure what is strategically important so that you can manage and improve it.

What really matters to your business is your supply chain ?end game? objectives. That?s what you need to manage, regularly and consistently, so that you can set realistic targets for improvement. You then choose the corresponding key performance indicators (KPIs) that let you measure your performance compared to your targets. You also embed them in the culture of your organization, with the clear understanding that they are there to serve your objectives, and not the reverse.

Different organizations will have different KPIs. What works well for one may not be relevant for another, so resist the temptation to copy what another company uses. Go through the process of setting your own objectives and targets, and then defining KPIs that give you the right measurement of your own performance.

You?ll know if you have good supply chain KPIs
when the following are true:

• KPIs are recognized in your organization as ?meaningful and relevant.?
• KPIs are tracked and understood across functional departments.
• KPIs are used to focus on and drive performance improvement.
• And last—but by no means least—supply chain performance is improving!

Improved supply chain performance means that you get a better return on your investment—or similar performance as before, but for less money.

Basic principles still apply
In my experience, when companies focus on these seven areas of supply chain management, very often they easily uncover significant cost savings. Not all of these areas may need ?fixing? in your own business. However, in almost every company, at least two or three are likely to be worth investigating for potential improvement. No matter which areas you choose to concentrate on, the most basic principles of effective supply chain management will still apply: understanding customer needs, defining the right company objectives and strategy, executing on that strategy, and measuring the results so as to be able to continually improve the whole process.

Excerpted by permission from the forthcoming book Supply Chain Secrets: The number one guide to saving your business millions, by Rob O’Byrne, to be published in July 2011 by Global Publishing Group (Australia).

Editor’s note: Readers can download Chapter 1 of Supply Chain Secrets at no charge.

Most of all, talk with your friends about saving. Those that yawn and can’t understand why it’s interesting probably won’t have much info for you, but the people who get really jazzed about 25 cent coffees, senior discounts, rebates at Menards, and building rain barrels are the ones that you want to listen to. Start sharing and start learning from each other.

Forty percent of all households in Canada have saved money in these accounts, and more than half of those households are low-income savers. Forty-three percent of British adults hold an account, and similar to Canada, 50% of account holders earn less than 20,000 pounds sterling (about $26,000).

The author of “Pick Another Checkout Lane, Honey,” Demer admits she came to this project as a skeptic. “If something sounds too good to be true, it is,” she said. With every deal her website tests and promotes, she says she “still fills that role” when it comes to verifying that a deal will work.

• If you’re balancing raising your kids and working from home during lockdown, it may feel like you’re up against an endless list of to-dos. 
• From online educational resources to upcycling hacks, there are plenty of ways you can keep your kids busy while stuck inside, without breaking the bank. 
• Visit your recycling bin for a plethora of DIY craft supplies, take advantage of online sales and shopping discounts, and ask for refunds for recurring costs like daycare or gym memberships. 
• Visit Business Insider’s homepage for more stories.

Between keeping our kids entertained and educating them daily, on top of the nonstop cooking and cleaning, mom life under quarantine can feel pretty chaotic. While we can’t make bedtime come any sooner, we can give you a few of our favorite mom hacks that will add a little extra padding to your budget during social distancing, and hopefully make your job as mom a little easier.

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