Profits from efficiency – are we missing the obvious?
Many organisations, big and small, have focussed on efficiencies, reducing waste, reducing costs to improve their bottom line and profits. So what is wrong with this? Nothing apart from one significant point – a single focus on increasing efficiencies through Lean and Six Sigma (or good application of continuous improvement) will lead to additional capacity and no sales to fill the capacity gap.
Not the best application of good business strategy.
A lost opportunity – lower costs but not the BIG KICK in Profits
A recent article by Mike Collins, author of Saving American Manufacturing believes that the continuous improvement (CI) plan MUST include marketing and sales strategy:
“A marketing plan should be part of the CI process. Increasing top line sales and overall growth are not going to automatically happen because you are Six Sigma certified. Top line growth will require a different kind of plan that should be developed in parallel with any process improvement projects. If not, the company will get to the end of its lean journey with plenty of new capacity and no new sales.”
Mike’s message is very clear – have a growth strategy along with your efficiency strategy and you will build your business – use the same process analysis to sales and marketing that you do to process improvement and you will have a complete strategic improvement plan.
