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The answer is simple, money! Contrary to popular belief, labor
costs are not killing American Manufacturers profits, the rest of their organization is. If fact, labor, even is a poorly
run company, rarely exceeds 8-9 % of Product Cost. In a Lean Organization it is typically closer to 4 %. This means that approximately
95 % of product cost is not associated with labor.
With the cost of Materials being so high, how much material
is on hand; (Inventory), what you do with it; (Value Added Activities), how quickly a company can transform these materials
into a saleable product; (Lead-Time), how long it takes to collect on sales; (Cash Manufacturing Cycle), have the lions share
of influence on company profitability.
Based upon these two observations, it is not surprising that Lean Organizations have
3 to 4 times the productivity of non-lean organizations and consequently 3-4 times the PE ratios (public corporations) when
compared to Non- Lean organizations.
Our Business Partners
Whether its Information Management, Materials Management or Manufacturing Process Improvement, The Lean Manufactruing
Group, Inc. and its Business Partners are ready to Transform your Entire Organization to higher levels of productivity &
profitability.
Katzscan, Inc, Specializing in EDI, Barcode Transactions, and Information Technology & Management for the World
Class Organization.
Katzscan Barcode& EDI Consulting
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