Many of the losers in today's tough markets have been companies that sincerely pulled together in pursuit of certain goals. The problem for them has been the same old story : the attitudes of employees, many of whom lack the confidence or courage to reach the goals Employees who think of what they cannot do instead of simply planning the next step ahead a the root of these failures. The key word here is innovation." Companies that forget that word are just biding their time until bankruptcy.
Another key concept is that profit is not something that pops out of the manufacturing and marketing processes and lands in the laps of the company employees. Rather, it is something the company has to create and earn through hard work. Companies have to take a more positive attitude toward profit-earning. They have to be creative and come up with devices and schemes that will help create profit. The way t start is to throw out every single conventional idea. The factory's local mythology--the proud tales of how many years the factory has been turning out good old Product X-has to be discarded and replaced by a cold, hard look at market needs.
Some companies have been able to do this, and some have not. Some just do not have the inner strength for it. Let us briefly examine what the anatomy of an unprofitable factory might look like, as illustrated in Figure 2.1.
In this example, the company figures its sales price using the production-oriented method, and then launches its sales activities. However, the actual costs turn out to be much more than the original estimate This shrinks the profit to a modest or very small amount. Unless the factory can recover its profit- ability morale will start to sink.
Some belt-tightening is needed, and such things as R&D and campaigns are the first to go. Soon the factory improvement falls into the bad habit of slashing precisely the programs that might alleviate the problem. Such short- sightedness ends up creating a genuinely unprofitable factory.
Now let us compare this money-losing factory to the one whose anatomy is shown in Figure 2.2
Many of the losers in today's tough markets have been companies that sincerely pulled together in pursuit of certain goals. The problem for them has been the same old story : the attitudes of employees, many of whom lack the confidence or courage to reach the goals Employees who think of what they cannot do instead of simply planning the next step ahead a the root of these failures. The key word here is innovation." Companies that forget that word are just biding their time until bankruptcy. Another key concept is that profit is not something that pops out of the manufacturing and marketing processes and lands in the laps of the company employees. Rather, it is something the company has to create and earn through hard work. Companies have to take a more positive attitude toward profit-earning. They have to be creative and come up with devices and schemes that will help create profit. The way t start is to throw out every single conventional idea. The factory's local mythology--the proud tales of how many years the factory has been turning out good old Product X-has to be discarded and replaced by a cold, hard look at market needs. Some companies have been able to do this, and some have not. Some just do not have the inner strength for it. Let us briefly examine what the anatomy of an unprofitable factory might look like, as illustrated in Figure 2.1. In this example, the company figures its sales price using the production-oriented method, and then launches its sales activities. However, the actual costs turn out to be much more than the original estimate This shrinks the profit to a modest or very small amount. Unless the factory can recover its profit- ability morale will start to sink. Some belt-tightening is needed, and such things as R&D and campaigns are the first to go. Soon the factory improvement falls into the bad habit of slashing precisely the programs that might alleviate the problem. Such short- sightedness ends up creating a genuinely unprofitable factory. Now let us compare this money-losing factory to the one whose anatomy is shown in Figure 2.2
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