business plan drafting Economic Planning

Workflow and Revenue

There is a direct correlation between an efficient workflow system and company revenue.

The cornerstone principle of Lean is to eliminate bottlenecks (i.e. waste) in a workflow stream, improving its overall efficiency, and enabling a company to deliver more value to more clients more quickly.  Quicker production allows for more projects to be completed, thereby generating more revenue over a given period of time.

Calculating this relationship is simple.  Multiply your company’s throughput rate by the average value per project.  Assuming 10 completed projects a year, each having an average value of $1,000.00 per project, then gross revenue is calculated as

10 projects x $1,000.00 = $10,000.00 gross revenue

From this equation, it should be obvious that the higher a company’s throughput rate, the greater its gross revenue.  Integrating Lean into your company will increase its throughput rate and consequently, its gross revenue!