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Elements of Profit
Profit Process Ex.

 

 

Elements of Profit

cost reduction model - profit equation

Profit is a function of Expense, Loss, and Revenue. 

Conventional Cost Reduction Programs work only in the arenas of Expense and Loss...and usually just expense (cost reduction).  People are exhorted to cut, cut; cut.  The net result is quite often a feeling of insufficiency and hopelessness.  It is impossible to cut one's way to growth and prosperity.

Click on the regions of the figure to see what each of these elements is all about.

The Profit Improvement Process engages all three of these elements in a positive and proactive manner.  The net result is growth concomitant with reduction in waste and a redeployment of assets in more positive and fruitful directions.  Other programs tend to focus on expense and, to a lesser degree, loss.  The Profit Improvement Process supports revenue growth when others impede it.

People all too often get the short end of the stick in cost reduction.   The Profit Improvement Process is designed to help people and companies prosper.

 

Achieving World-Class Profit Improvement:  See world-class profit improvement processes.    A must-have resource for any  cost reduction practitioners.
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