Company and Department Cost Reduction and
Profit Improvement Examples
A $20 million company manufacturing and
distributing a variety of products was losing money. We assisted
with Profit Improvement on a campaign basis and realized over
$900,000 in increased annualized profits. Projects included expense
reduction, loss and quality improvement, and revenue
rationalization. In some cases profit from revenue was improved by
stopping unprofitable sales. First year savings were about $400,000
and the rest came in the next year.
An $800,000,000 service company was
experiencing significant business pressure and needed increased
profits to satisfy its stakeholders. We installed a PIP over a
period of about 6 months. We trained 250 of the 2,500 staff. We
also trained their trainers to carry on the process and left after
about 70 consulting days.
A total of 4,426 profit improvement ideas were
generated just during training. Within the first 9 months over
$5,500,000 in profits were added to the bottom line and over
$110,000,000 in potential profit projects were being evaluated in
the idea pipeline.
A $10,000,000 high technology manufacturing
company was not generating a profit. We introduced Power Idea
Session tools and generated over $1,900,000 in increased profits
over a two-year period from the Power Idea Session projects. Much of the
profits came from the reduction of losses and quality problems in
A small supplier to the Jewelry market was
experiencing intense price pressure and competition from China. It
looked like he would have to close. We conducted a 5 hour Power
Idea Session to see how he could create a market niche that would
survive. Over 60 promising ideas were created and two projects were
developed that the client felt would allow him to compete
The accounting department for a small company
was unable to get its work done in a timely manner, had serious
errors, and was suffering from severe staff turnover. We ran PI
Sessions to find the root causes of the problems, identify
solutions, and put them into action. Within less than a year, the
end-of-month reporting time had been cut from 30 to 45 days to 5
days or less, the error rate in AP and AR had been cut by over 90%,
turnover had been almost stopped, and the overall working conditions
were substantially improved. The estimated profit impact was
$75,000 due to the above improvements that cut costs and allowed
better cash management. In addition to happier employees,
management, vendors, and clients were also much happier.
Transaction Processing Department:
A transaction processing department for a large
company was experiencing major problems across a wide range of
issues. These problems were impacting both the quality of service
and costs. We conducted a Power Idea Session focused on
understanding the issues at hand. Within two days we had identified
over 400 issues facing the department management. We analyzed and
prioritized those issues into 12 manageable projects that when
completed achieved 90% of the goals. Costs were reduced by over
$300,000 and quality improved rapidly. In addition, management went
from crisis management and fire fighting to a more comfortable and
sustainable mode of project management.
These are a sample of Profit Improvement
projects and processes that have been performed using the powerful
methods inherent to the Profit Improvement Process.
these increased profits came from the people within the companies.
The Power Idea Sessions brought the ideas to light and the Profit
Improvement Process enabled innovation to occur. The
people were then able to make these changes happen. Top management
led the charge but it was the staff that made it happen.
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