Workflow and 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!