Productivity Gains – How they Really Impact the Bottom Line

Increasing productivity or reducing the amount of “people time” associated with various processes usually sounds like a good idea. In a few instances, the impact of increasing process productivity on the bottom line is clear and simple. It may reduce the expenditures on overtime or contract workers.

However, beyond those few cases, productivity improvements for employees do not directly reduce expenditures, but instead increase capacity; and the extent to which these improvements benefit the bottom line depends on how that capacity is put to use.

The impacts can be extremely profitable or can amount to nothing — or worse!

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Are We Learning?

The history of commerce is littered with organizations that have erred in big and varied ways. There were Wang’s strategic errors, GM’s stifling bureaucracy and short-sightedness, Digital’s burdensome overhead, Enron’s dishonesty, AIG’s recklessness, and… more recently, there are Toyota’s troubles, which many believe are troubling in an entirely new way ( see related article).

But there has been more than enough said and written about all of these situations and miscues – so, the question is, what lessons have we learned? We look forward to your thoughts!

Challenges and best practices associated with continuous improvement