VIEW – A Way To Drive Down Costs

Did you know that managing costs can lead to higher costs?

Toyota’s Ohno was one of the few to realise that the way to cut costs was to focus on flow instead.

There are four flows that matter, and I came up with the mnemonic VIEW to remember them.

Value is about revenue – delivering what the customer actually wants.

The other three are about costs – the inputs into a business.

You reduce costs by improving how they flow through your business.

For example, we used to calculate a client’s carbon footprint once a year – at reporting time.

We redesigned our system to reduce manual work by 90% – reducing friction, delays and errors.

Now we can see our position daily, making reporting significantly easier.

This is improving information flow in practice – and we can drive down a client’s costs as a result.

Energy and materials can be improved in the same way.

Stop managing costs. Design better flows instead.