financial costs

• Purchasing new equipment
• Redundancy payouts
• Retraining
• Costs associated with structural reorganisation of the business, including changes to plant and equipment layouts

purchasing new equipment

• more consistency in production
• shorter lead times
• reduced wastage and losses from equipment failure

redundancy payments

Implementing staff reductions incurs mandatory redundancy payments to the workers retrenched.

retraining

staff become more skilled, thus quality of outputs improves

reorganising plant layout

initially expensive (transport costs etc), but aims to increase efficiency, thus reduce expenses in the long term

inertia

(a term that describes a psychological resistance to change)

• Feeling of uncertainty
• Fear of the unknown