IMPROVING PROFITS USING LEAN
The overall productivity and efficiency of an organization can be measured through increasing returns. In order to achieve this, companies will have to ensure that effective management, sustainable methodologies and skills management are in place. These are significant in a company’s profit margin since they are critical factors which directly affects cost and quality production. Understanding the importance of practicing lean quality procedures and efficient risk strategies have great impact to the overall cost and financial performance of an organization. Therefore, a lean and sustainable methodology is vital and should be implemented in order to achieve production efficiency and significant improvements in your margin profits.
What is LEAN?
1. Lean is a Proven Strategy: Lean is proven. It has produced significant improvement for thousands of companies. It is not necessary to reinvent the wheel, only adapt a proven and existing system which is readily available, easy to understand, and then apply it to your own business.
2. Lean is Focused on the Customer: The foundational principle of lean is to focus all value added activities on your customer, and to remove or mitigate, all non-value activities. This customer focused approach is critical to a high growth technology company, and all other activities should be aligned with the customer including financing, product development, and administration.
3. Lean Is A Culture not a Tactic: Companies which have successfully implemented lean thinking fully embedded it into the culture, so it is pervasive at all levels of the company across all activities. Like innovation or entrepreneurship, Lean is something a company is, not something a company does.
4. Lean Makes You Money: By focusing on the customer and by stripping away non-value added activities, your precious capital is precisely deployed and significantly levered. This improves sales, gross margins, and cash flow, which will mitigate the need for external financing.
Where to use?
Lean management may be a useful approach to process improvement where individuals: