In today’s environment, the need for companies to become more efficient in everything they do has never been greater. Profits are being squeezed not only by a recessionary economy, but also by international competition. In this global, “flat” environment the “china price,” the ability of countries like China to manufacture products at very little expense, sometimes subsidized by their government, can be intimidating to U.S. manufacturers trying to compete. Now more than ever U.S. manufacturers have to eliminate waste, improve efficiencies, and demonstrate to their customers the value proposition of their products.
There is certainly no dearth of comprehensive programs aimed at helping managers improve their operations – so many in fact that it can be overwhelming. Books, magazines, and the world wide web are filled with the likes of Six Sigma, network optimization, continuous flow processing, fishbone, and Kanban—just a few of the latest buzzwords that those responsible for corporate profits are being pressured to understand and implement. Many of these techniques have been branded by top consulting firms, then sold to multinational corporations, sometimes at a cost of many millions of dollars. Other companies just borrow from the latest management theories and put them into their own comprehensive profit improvement programs.
There is great value in programs like Six Sigma and lean manufacturing, of course. They have made world class companies out of global giants GE and Motorola, among others. But the vast majority of companies – certainly those doing under $100 million in sales – do not have the financial resources or the inclination to focus on these increasingly sophisticated techniques. There is also the intimidation factor. Names like Fishbone, Direct Material Optimization, and Discounted Cash Flow sound like you need a PhD, or at least a high priced consultant, to understand. Nothing could be further from the truth.
Maximizing Profits Immediately: How to Dramatically Improve Your Company’s Bottom Line will pull away the curtain and reveal that the building blocks of the latest profit improvement strategies can be found in the tried and true techniques that people like Harry E. Figgie Jr., and now the book’s other two authors, have implemented so successfully for more than half a century. At their core, business improvement philosophies like Six Sigma and lean manufacturing need certain fundamental profit improvement tasks, like ratio analysis, ABC stratification, and value analysis in order to be successful. A Six Sigma program, for example, will not be effective without first conducting a comprehensive ratio analysis in order to determine during which years the organization performed best in a variety of spending categories. Only then can Six Sigma goals be made and met. Likewise, lean manufacturing will not be particularly meaningful unless all those on the front lines charged with its implementation understand certain foundational principles that come into play well before any manufacturing actually begins.
In other cases, many of the most modern terms actually correspond to the techniques that Harry Figgie honed as a Booz Allen consultant in the 1950s. Pull production, for example, is really just another name for sales forecasting. Just in Time and Kanban are not much more than different ways to describe ABC Inventory Control. In the worst instances, modern management concepts only serve to obfuscate their true genius: their simplicity and ease of implementation. The principles laid out in the following pages can help managers to quickly put in place operational strategies that will continually work to maximize profits week after week, year after year.
Maximizing Profits Immediately will explain how Six Sigma and the like relate to our more fundamental profit improvement techniques. In the process, using simple, straightforward techniques that anyone can learn in a few weeks, the book will teach managers how to improve profits immediately, and then year after year. Each chapter of Maximizing Profits Immediately will be self-contained so that the book does not have to be read in one sitting, and can be used as a reference to address a specific problem. Our goal is to provide “readable,” hands-on, relevant skills to corporate personnel and entrepreneurs interested in making their organizations world class, without the complexity or expense of most modern profit improvement theories. Maximizing Profits Immediately without fanfare, without having to hire a legion of expensive consultants, will show managers of small and mid size manufacturing companies how to implement common sense and proven techniques to set realistic goals and achieve immediate, outstanding, measurable results.