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Increase Profits By Running A Lean Business

Author : Bill Gerber
Comments: 0

Topics: improving sales

Efficiency is a word thrown around a lot in business but managers often have trouble converting the concept into specific steps. Creating a lean company requires ongoing dedication but improves production, reduces waste, and builds a better business.

It’s About The Culture

One reason companies find it so difficult to achieve lean practices is they take a piecemeal approach. They change a process or bring on a new tool and are disappointed when nothing changes. Implementing lean practices without adopting a lean culture doesn’t address the real problem. Efficiency tools become crutches, not solutions.

Organizations need to change their attitudes toward business. Efficiency isn’t about a single step or solution. It’s an ongoing approach to business decisions, and a way of viewing the business word and your company’s role in it. Once a business adopts a lean attitude, efficient solutions become obvious. The more people involved in this culture of lean, the more successful it will be. Include all managers and employees in the process, but also include contractors and vendors such as an outsourced accounting department.

Finding Value Streams

It’s hard to measure efficiency without being able to quantify a process. This is where the professional accounting services of an outsourced accounting department are beneficial. They can provide the numbers that help managers see where inefficiency lies, and evidence that new policies are improving value.

In a manufacturing environment, a value stream might be the process from buying raw materials to producing a finished product for a customer. Analyzing every step of that process with the help of an outsourced accounting department shows where the inefficiency is and what steps should be taken to improve efficiency and therefore value. The net result is less waste and lower production costs. This can be turned into higher profits, or can allow a reduction in sale price to reap the same profit but to gain a competitive advantage against more expensive competing products.

Ongoing Commitment To Lean Business

There is a natural tendency for a business to return to its old ways. The momentum of “we’ve always done it that way” is hard, but not impossible, to overcome. Organizations must continually recommit themselves to lean attitudes and culture.

Markets change and practices that are efficient today could be hopelessly out of date in a year. More proactive competitors will quickly leave behind companies that don’t regularly review and analyze their value streams. Don’t want for business to fall off to realize there is a problem. Ongoing reports from an outsourced accounting department can be the source of early warnings of impending problems. After all, the time to react to a fire is at the first whiff of smoke, not when the house is consumed in flames.

If you don’t have an existing relationship with professional accounting services, contract with an outsourced accounting department for the expertise you need to adopt a lean business culture.

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