Off to the east of Indianapolis (our hometown) is a small utility provider. A friend told me he went in there once and found the administrative staff sitting at their desks, folding bills and stuffing envelopes. It turns out they all took one day a month — about 5 hours — to fold and stuff all the bills for the day.
“Why don’t you have a machine that does that?” my friend asked one of the women folding away.
“They cost too much money,” said the woman. “We have to watch our costs.”
My friend was stunned. It’s this short of short-term bureaucratic thinking that ends up wasting money, instead of saving it. Somehow, managers get it in their heads that it’s somehow cost effective to pay employees $12 per hour to fold letters or bills, put them into envelopes, and run them through the postal machine.
Let’s break it down and see why this is just plain wrong.
If you pay 6 staffers $12 per hour to fold bills, that’s $72 per staff hour. And if it takes those staffers 5 hours to fold and stuff all those bills — keeping them in ZIP code order, no less — that’s $360 per month.
But look at the for $10,395. Sure that seems like a lot, but consider this:
The 6202 can fold and insert up to 2,200 pieces per hour, or do all the inserting that six people did in five hours. If one person ran the machine once a month, it would cost that utility $60 per day to run bills.
And save them $300 per month, or $3,600 per year. In three years, they will have paid for the machine. Every year after that, they’re going to save $3,600 per year.
This will end up making their entire office more efficient, freeing up the stuffers to work on other projects around the office.