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 This Week’s Topic:
Grow Revenue With Lean Six Sigma
Question: There's no lack of information about saving money with Lean and
Six Sigma but not nearly as much about whether they can be used to grow the top line. I know
all the generalities about becoming a better manufacturer but can you be more specific?
Answer:
You are exactly right - the most common view of Lean Six Sigma at the executive level
is that the tools are for tactical cost reduction by middle and lower
management levels. But that is only part (and in many cases, a small part) of Lean Six Sigma's
real potential. When strategically adopted by manufacturers, Lean Six Sigma can dramatically
improve overall business performance including revenue growth. Lean Six Sigma allows for the
redeployment of non-value adding resources to activities that can create business growth in the
near and longer terms. Revenue growth from current or new products is earned from present
customers and new customers by creating and delivering superior value.
Here are six specific ways Lean Six Sigma can help a company grow revenue:
- More free cash flow to develop new products, make acquisitions and/or increase marketing
activities.
- Lean manufacturers are highly flexible and quickly respond to customer needs faster, better
and cheaper than the competition yielding upward momentum in marketshare.
- Current customers give the best suppliers more orders and often earning sole source status.
- Develop a ‘cost to produce’ advantage that provides more pricing flexibility to gain more
sales.
- When the marketplace heavily weighs quality, dependability and, quick response then, the
sales organization develops the “lean value proposition” and perspective customers listen and
act accordingly.
- Faster, better and lower cost new product development and introduction with good products
getting to market in a much shorter cycle time.
Manufacturers who are “lean prolific” experience the “mushroom effect” in business performance
improvement including significant top and bottom line improvement.
To learn more on this important subject please download our whitepaper:"Lean Six Sigma: Accelerating
and Achieving The Real Potential of Lean". Registration is fast and requires only your name and e-mail address.
If you have a topic that you would like addressed, or an insight you
would like to pass along, e-mail us at: Jack.Rink@rmdonovan.com
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