|
|
|
|
Business Definitions - Key Terminology Body language: The physical cues our bodies make while communicating. Body language represents up to 93% of the true message and often overrides or significantly modifies the spoken or written word. more Business consulting: The practice of specialized experts in particular business fields. They bring tools, knowledge, skills, systems and perspective. Consultants may be found within the ranks of a company or, as is more often the case, brought in from the outside. more Cost reduction: Profit improvement focused solely on the reduction of costs; sometimes even at the expense of growth and profitable revenues or strategic investments. It is a short term approach to profitability. more Cost reduction program: An organized systematic on-going initiative to cut costs; often in more than one budget area. more Cost reduction project: An organized one-time initiative to cut costs in a specific budget area and, possibly, a specific line item. more Cost Savings – imaginary: An action that is thought to reduce costs but, in fact, may have either no positive effect or actually increase costs. This is the result of poor selection of cost reduction projects or a less than rigorous accounting for cost reduction activities. more from our profit-pro.us site Cost Savings – real: Clearly identifiable savings in a specific expense line in the budget as a result of a cost reduction project or cost reduction program. Courage: Doing what is right for the greater good even in the face of uncertainty. more Creativity: The development of something that is new and useful for a time. more Creative Problem Solving: Creative Problem Solving (CPS) is a powerful creativity and innovation model that can be used to deliberately drive creativity and solve problems. more Fear: An emotion that often fills the space where uncertainty prevails. Innovation: Applied creativity. more Instant Profits: A powerful new business book for maximum profits, quickly. more Inventory turns: The velocity at which capital moves through inventory. It is often measured as the number of times per year inventory is sold or used. The lower the turns rate the higher the consumption of capital. more Inventory cost: The often underestimated cost of holding inventory including all costs plus that of acquisition. It is often estimated to be 25 – 35% per year. more Layoff: A reduction in workforce that may very well indicate that management was asleep at the switch and had not been proactive in profit improvement. more Listening: The most powerful side of communication. No communication happens unless the parties listen to one another. Employee suggestions most often fall on deaf ears and the benefits are lost. more Power Idea Session: A professionally facilitated creative meeting with the objective of creating, identifying, evaluating and setting to action solutions to a problem. It is typically applied to profit improvement. Power Idea Sessions last from 1 to 2 days with optimally 7 to 14 people and produce several hundred potential solutions that are converted to a dozen or fewer prioritized and immediately actionable plans. more from our profitpro.us site Profit equation: The profit equation principle is that profit is a function of revenue, expense and loss. Simplistically we would say to subtract your expenses and losses from revenues. In reality, the interaction is complex and lies at the very heart of business success. more
Profit improvement process: The Profit Improvement Process is based on the profit equation and approaches profits by engaging the intellectual capital of the company to work on not only expenses and losses but also revenues. It will invariably succeed. more Root Cause Analysis: A powerful systematic approach to find the actual causes of problems in such a way as to prevent future occurrences. Widely used in the safety and quality fields as well as profit improvement. more Six-sigma: Six sigma is a cost reduction methodology based heavily in statistical methods and a corrective action model. In it’s approximately one decade of existence it has been shown to be successful in improving profits about 60% of the time. more
|
Cost Reduction & Profit Improvement
|
