Everything Lean For Leaders And Their Teams

Building Continuous Improvement Management Systems

Lean Consulting

Lean Training

Lean Products

Lean Support Services

Forms and Tools

Lean Dictionary
Consulting Training Products Services Forms Dictionary

Call us at 1.800.670.5805

Email UseView Cart

Gotta Go Lean BlogView Cart

View hundreds of terms in our Lean Dictionary

Lean Definition: Profit

Profit—the concept is pretty simple. It is the pile of money that is left over after all the bills are paid and the costs are tallied. There are many different types of profit for accounting purposes (net profit, gross profit, EBITDA).

The ultimate goal of any company is to make a profit. It is not to serve customers. It is not to be good corporate citizens. It is not to create jobs and generate employee job satisfaction.

Those are all means to an end. They are all very important, and are great ways to make profit, but if those were the end goals, there are better ways to do each of them. (Non-profits, charitable work, volunteering, etc.)

Profit also gets confusing when you consider the timeframe. Turning a quick profit is easy if you cut all R&D. But it sacrifices the company’s future. It is important for all the stakeholders to be aligned in setting profit goals, or they can end up at odds with each other.

Lean helps increase profit by both reducing costs, and improving sales. Many of the benefits of Lean make products easier to sell. Low lead time and high quality are obvious selling points. Lean also lowers inventory, making the decision to redesign a product less costly.

When it is done well, continuous improvement can increase job satisfaction, improving customer perceptions of the company. Time and again, research shows that happy employees make happy (and profitable) customers.

Add a Comment

Share Your Thoughts    |No comments|

© 2009-2012 by Velaction Continuous Improvement, LLC. All rights reserved.

Gotta Go Lean Blog

Don't forget to sign up for my Gotta Go Lean Blog via RSS...

rss-feed-3d

Lean Definitions | Tags:

Other Information You May Be Interested In...

  1. Marketing: Lean and Your Brand I was freshening up my draft of the brand entry for The Continuous Improvement Companion (click this link to go to its online Lean Dictionary), and thought it would make a good,...
  2. Internal Suppliers A supplier who is a part of the same company as ists customer is an internal supplier. They may providers products or services. They are the upstream processes and the...
  3. Lean Accounting Accounting is a necessary part of any business. It is critical to know if the actions a company is taking are making it profitable, or if they are causing the...
  4. Using Lean: Who We Help Using Lean is Hard. We Help Make It Easier. Using Lean can be a big challenge. We try to make it easier by providing specific tools and information for many...
  5. Lean Service What is ‘Lean Service’? Lean service is the application of continuous improvement in customer facing operations. Regardless of whether a company is in a service industry or not, it still...
  6. Agile Manufacturing Agile manufacturing describes a company’s ability to be responsive to the marketplace. A company has to be able to roll out new products and services as the needs and desires...

Comments and Feedback:

Please leave feedback about this entry.

You can leave a response, or trackback from your own site.

Leave a Reply