Can We Really be Preventative: Increasing Profit from a Prevention Approach
There’s an old saying that’s popular among personal finance counselors. They often say, “It’s not what you make that’s important. It’s what you keep.” Those words are excellent advice, not only for everyday households but for businesses as well. Organizations often forget that profit is what’s left after subtracting expenses from revenue. But sometimes the even bigger picture includes the concept of preventing waste in the first place. Therefore, real attention to the bottom line must include attention to waste.
Our 5S Organization Guide includes easy to follow steps for minimizing waste through better organization.
The people who run Toyota are no strangers to this principle. In fact, they have built their entire management philosophy around the goal of eliminating what they call “the seven wastes” which are as follows:
- Overproduction, or making more of a resource than needs justify.
- Waiting, or what others might call “down time.”
- Defects, defined as substandard products unsuitable for resale.
- Needless motion or action, known informally as “going around your rear end to get to your elbow.”
- Excess transportation, which is caused by unnecessarily separating one phase of the production process from another. Intimacy breeds efficiency and vice-versa.
- Needless complexity, which is the opposite of “keep it simple, stupid.”
- Needless inventory, also known as “having stuff for the sake of having stuff.”
Some of these might be readily applicable to your job site, while others may not offer as much value outside of the car industry. But everyone needs to deal with wasted time and wasted effort in the workplace. Besides, Toyota enjoys stellar profits while selling its vehicles at ultra-competitive prices, making the automaker worthy of emulation. But profiting from their example takes more than intellectual assent. It requires analyzing every aspect of how your organization does things, with an eye towards removing anything that doesn’t add value to the final result. Doing so will likely entail some painful adjustments. But the end result is worth the agony involved, especially in today’s hyper-competitive world.
As we are routinely called out to work in many environments and job sites we find that the work we have done to bring consistency to our methods is key to our success. We’d love to share some of these insights with you.
At Mid-Land Enterprises there is no job to small or too big. We can work independently, or alongside your crew. Just know that we’ll bring our great work ethic and organizational methodology along with us. Our clients rely on us for this kind of professionalism. Let us know how we can help, so you can focus on keeping more of your profits!