One of the foundational aims of any businesses employing processes to create products or services is consistency.

1. HOW SOPs CAN REDUCE
COST AND INCREASE
PRODUCTIVITY

2. About this template
INDEX
2
S. No. Title Page No.
1. Introduction 3
2. What are SOPs? 5
3. Reasons Demonstrating SOPs Reduce Cost & Increase Productivity 6
4. Conclusion 16

3. INTRODUCTION
3
One of the foundational aims of any businesses employing
processes to create products or services is consistency. This
can be hindered by members of a team producing different
outcomes according to their perspectives and abilities.
Such a scenario is neither desirable nor sustainable for business
to function successfully and customers would be put-off,
switch over or walk away due to the inability to experience
consistency in a product or service.
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4. INTRODUCTION
4
To overcome this, businesses are known to employ SOPs, wherein every stage of a
task is broken down and enumerated in detail and documented as a process
manual to be followed by a team with a common purpose. This exercise ensures
consistency within the process and the outcome that follows. Successful businesses
are known to follow SOPs allowing them to standardize and formalize processes to
improve productivity, reduce errors and save on costs.
We at YRC are great proponents of Standard Operating Procedures (SOPs) and
come with years of experience at developing and implementing them.
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5. SOP can be termed as a set of documented procedures that a company puts in
place to ensure products and services are delivered each time with the same
consistency. SOPs are known to align with existing industry regulations,
applicable laws and even operational & quality standards set forth by the
company
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WHAT ARE SOPs?
5 Index

6. REASONS DEMONSTRATING SOPs REDUCE COST AND INCREASE
PRODUCTIVITY
6
Now that we understand SOPs let’s look at how they are able to reduce costs and
increase productivity.
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7. In two or three columns
SAVE ON EMPLOYEE TRAINING
7
When a new employee joins the company, he is expected to
be provided training about the process he/ she is going to be
involved with. But with SOPs in place, there would be minimal
need for face-to-face training as a well-written SOP tends to
be articulate with the inclusion of visual elements. The
employee can get acclimatized to the process by himself
thus saving the company of the costs associated with
training.
Such a seamless practice also helps in improving productivity
as the employee always has the option of going back to the
SOP in case he/ she is doubtful to master the process in the
long run.
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8. IMPROVES ADHERENCE TO REGULATIONS
8
There are industries that are highly regulated and a deviation
from set standards can be damaging financially and
reputation-wise. To prevent such deviations SOPs can be
written with built-in stipulations that prevent any deviations
from occurring in the first place, thereby leaving no room for
non-compliance.
This, in the long run, can bring in enormous savings that could
be lost on potential litigations and compensations to be paid
out.
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9. Use charts to explain your ideas
REDUCES RISK OF ACCIDENTS
9
Certain industries are accident-prone by nature and
incorporating safety guidelines within the SOP will allow
companies to offer a safe working environment for its
workers. By creating safe work areas, a company stands to
benefit as employees would not get distracted by safety
concerns and productivity would improve naturally.
Besides, with less or no accidents a company does not lose
out financially from the costs arising from the aftermath of an
accident. A company with enough precautions in place for
accidents offers its employees great scope to increase
productivity.
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10. Use charts to explain your ideas
IDENTIFIES AREAS OF IMPROVEMENT
10
By the consistent use of SOPs in all processes, there is a good
chance of employees coming forward with improvements
related to a critical process. With the comprehensive
understanding of the process and its nuances, an employee
would be the most likely candidate to suggest improvement
associated with a process.
In the long-term, this can translate to savings in terms of time
and money and can be directly attributed to improvements
in productivity.
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11. Use charts to explain your ideas
ENSURES BUSINESS CONTINUITY
11
Every business would have contingency plans to cover for
the absence of an employee is a critical process. This backup
employee would be well served with the availability of SOPs
that ensures the continuity of the process.
Such measures prevent overall productivity from going down
and avoid potential losses that might be caused due to an
absent employee. Thus, an SOP is a critical component in
ensuring businesses run smoothly by overcoming disruptions.
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12. Use charts to explain your ideas
EMPLOYEE ACCOUNTABILITY
12
Once an SOP is in place, employees know it by themselves
what is expected out of them. By laying down the
expectations clearly in an SOP, you also remind the
workforce that they are being monitored for their
performance with potential incentives if they perform well.
This makes SOP an integral catalyst that motivates employees
to perform to their optimum best, thereby improving
productivity. Research shows that as many as 35-55% of
employees tend to avoid responsibility on an average and
this behaviour tends to cost companies dearly. Such
behaviour can be mitigated with SOPs
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13. Use charts to explain your ideas
STANDARDIZE OPERATIONS
13
SOP documentation helps in standardizing operations to
ensure accuracy and predictability because it guarantees a
similar outcome each time for a repeated process. Over
time, this document can serve as the underlying premise to
delegate, outsource or automate the entire process to
ensure an increase in productivity
Such an immediate switchover is not possible without
breaking down the entire process into manageable steps
with an SOP. Thus SOP can also be the basis for the company
to scale up its operations manifold without second thoughts.
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14. Use charts to explain your ideas
SAVES VALUABLE TIME
14
Creation of an SOP always involves a competent stakeholder
who knows the process inside out. Such a person
incorporates his mastery over the process to create an SOP
that gets the job done in the fastest possible time. An SOP
then becomes a standard document that essentially supports
an employee to improve their productivity with minimal
intervention from the supervising staff.
For instance, by implementing 157 SOPs a food manufacturer
was able to put in place four packaging lines at the same
time which otherwise would have been a daunting task
considering they worked in three shifts.
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15. Use charts to explain your ideas
PERFORMANCE MANAGEMENT
15
By establishing an SOP you are banishing the guesswork
associated with employee performance. In other words,
without an SOP, gauging work performance is a matter of
opinion without any objectivity. However, with SOPs in place,
managers will have clear insights into successes and
deficiencies associated with employee performance.
This gets communicated to employees at appropriate forums
backed by sound advice encouraging them to improve on
their current productivity.
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16. Use charts to explain your ideas
CONCLUSION
16
Standard operating procedures are efficient and effective for new and existing businesses
alike. Once they are documented and implemented they guarantee positive results.
Overall, it is a process of systemization, wherein the management is simply expected to play a
supervisory role by checking-in every now and then while supporting people to perform at
their peak. When you put the right systems in place, the intended results are bound to follow-
through without major hurdles.
Your Retail Coach (YRC) is a leading agency that is known for making SOPs for not only retail
businesses but many other industries. We are a leading management consulting and retail
consulting agency in India and around the world with an array of clients whom we have
offered effective & implementable consulting services.
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17. Use charts to explain your ideas
FOR MORE DETAILS
17
To know more about “How SOPs can Reduce Cost & Increase Productivity”
visit:
https://www.yourretailcoach.in/how-sops-can-reduce-cost-increase-productivity/
 For India & South Asia: https://www.yourretailcoach.in/
 For Dubai & Middle East: https://www.yourretailcoach.ae/
 For Africa: https://www.yourretailcoach.africa/
 Business Process Xperts: https://www.businessprocessxperts.com/
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18. 18
THANKS!
YOUR RETAIL COACH
Email: consult@mindamend.net
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