Currently, the challenge for manufacturing organizations i
s how to achieve their expected profit by continuously improving productivity or reducing costs. Manufacturing organizations have been using different improvement approaches to achieving cost reduction and productivity improvement for years by eliminating various losses and waste structures, such as excess inventory, excessive workforce, excessive capacity, excessive utility consumption, and so on. But is the problem solved? Unfortunately, no!
Often manufacturing companies focus on maximizing the flow and meeting customer needs but forget their real aim - to make a profit for their stakeholders. Too many organizations meet customer expectations by seeking to continuously synchronize the flow to market demand but forget to check that they are doing it profitably enough to ensure business continuity and prosperity. When the financial results show that they are not so profitable, it is already too late. Moreover, the strategic direction of systematic improvements according to the sales trend - depending on the current degree of production capacity utilization and its dynamic effects on cost structures - is deficient in many manufacturing companies. So, would the failure of strategic and profitable systematic improvements be an option? Of course not!