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Loss represents the wastage of resources. The loss component of business is
usually overlooked unless a Total Quality Management system is in place to raise
awareness. Following is a list of resources, the ways that they can be wasted, and a
summary of how a Profit Improvement Process can impact losses.
Resources include:
 | Time |
| Money |
| People |
| Good will |
| Knowledge |
| Culture |
| Work environment |
| Materials & supplies |
| Work in process |
| Finished goods |
Avenues of loss include:
| Quality rejects |
| Insurance losses |
| Theft |
| Inefficiency |
| Time delays in product development |
| Lost or unrealized productivity |
| Employee turn-over |
| Strikes and slowdowns |
| Wastage |
| Spillage |
| Returns |
| Warrantee costs |
| Unretained (lost) customers |
What PIP Does to Losses:
The Profit Improvement Process (PIP) identifies, quantifies, and prioritizes the areas of
loss that your business is experiencing. Priorities are addressed to increase
profits. Key points about loss management include:
| Every dollar of loss that is removed reports directly to the bottom line. |
| The elimination or reduction of losses give an immediate and favorable impact to
bottom line profitability |
| Reducing losses can increase sales - improved quality and/or productivity |
| Reducing losses often increases profits without any negative impact. Most often
the impact is favorable as quality improves
Achieving World-Class Profit Improvement:
See world-class
profit improvement processes.
A
must-have resource for any cost
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