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Line Flow Technology

Line Flow Technology

How to Exceed Profit Margin Expectations 

 


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Profit margins are the key to a healthy bottom line. In today's competitive business environment, it takes more than quick fixes, outsourcing and downsizing for companies to consistently achieve their growth and profit objectives. While these options may yield temporary financial relief, they will not lead the way to long-term business success. For businesses to consistently exceed growth and profit expectations, they need to fully understand and effectively execute the business basics of profitable growth. 

While many elements of these basics have been documented and presented in hundreds of management articles, books, video presentations and seminars, their fundamental relationship and synergistic importance to achieving solid growth and healthy profits has not been effectively defined and communicated.

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Over the past 30 years, we were led to believe that computerized systems would provide the solution to all our growth and profit problems. In manufacturing and distribution, systems like ERP were to provide the computer sophistication to significantly improve our delivery chain performance. In engineering, Computer Aided Design (CAD) systems were to be the high-tech innovation for improving engineering design and speeding the time-to-market process. In sales/service, Microsoft Office was to provide the
missing link in effective business communications while e-commerce software was to improve order sales capture rates and order processing speed.

In their efforts to draw closer to customers, many business management teams have lost focus on what should be a company's primary success target-- profitable growth. They have pursued Total Quality Management (TQM), Enterprise Resource Planning (ERP), Business Process Reengineering (BPR), ISO-9000, and Six Sigma with each respective guru
reassuring them that if they followed their program ... the bottom-line would take care of itself.

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Well, it hasn't happened! Like most perceived panaceas, each of these programs received a lot of hype but produced few success stories. While these programs contributed to better quality and improved customer service, they accomplished little towards helping companies identify and achieve their full growth and profit potentials.

For a measure of their shortcomings, one needs only to spend some time in a manufacturing facility -- especially during the last weeks of the final financial quarter. In a typical company, you'll find that converting the quarterly financial forecast into reality still requires costly overtime, internal/external expediting, last minute "on-the-run" product changes and even a little "smoke and mirrors." Results are scrap, rework and warrantee costs that negatively impact profitability and production problems that hinder growth. 

Line Flow Technology knowledge for anyone ... anywhere ... anytime.

Companies have spent many thousands of dollars in pursuing MRP/ERP and ISO-9000 certification, only to see their business decline due to uncontrolled operating costs that produced noncompetitive pricing. Other companies have won the Malcolm Baldrige Award for Quality and Business Excellence and subsequently fell far short of achieving growth and earnings expectations.

So, after introducing all these computer systems and more, why is it that most businesses are still struggling to sustain profitable growth and are no where close to achieving their full growth and profit potentials? The first reason is simple --the results achieved by any computer system are only as good as the people at the controls and the integrity of the data they provide.

 The second is complex -- most business managers facing major day-to-day problems and constraints adopt a totally reactive management style. Consequently, their time is consumed with "band-aiding" and/or finding ways to work around system and process problems -- leaving them little or no time to analyze and eliminate the root causes of ineffective systems and processes.

How does one turn around such a classic, "cart before the horse" syndrome? What's required is a top down, in-depth understanding of the fundamental importance of the business basics of profitable growth and a total commitment to their consistent and tenacious implementation.

Line Flow Technology knowledge for anyone ... anywhere ... anytime.

Like Vince Lombardi, who achieved success by having his team focus on the mastery of football basics -- we need to have our business teams focus on the mastery of business basics. Proactive planning and tenacious execution of the basics requires leadership above and beyond just satisfying "day-to- day" accountabilities. Some managers can't envision the benefits of mastering business basics, other simply can't find the time. Like practicing blocking and tackling in football, it's not glamorous, and like most football heroes, managers prefer to run with the ball. But without the tenacious and flawless execution of business basics, companies will never achieve their full potential.

While many business gurus have identified one or more of these business basics as important to the successful pursuit of business excellence, the fundamental importance of these basics has been lost in the proliferation of buzz words and the mania of systems sophistication. It is time for companies to put a hold on sophisticated systems development that cause self-inflicted, day-to-day chaos. In its place, they should immediately initiate an action learning program for gaining a company wide understanding and acceptance of the importance of business basics. 

Once buy-in and commitment have been achieved, aggressive planning and
tenacious implementation must follow. In short, let's put the "horse before the cart" -- such a program will build a solid foundation for redefining and revitalizing a company's pursuit of growth and profits.


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