The Business Book

296

ELIMINATE

UNNECESSARY

STEPS

SIMPLIFY PROCESSES

T

here are several ways that

companies can improve

their profits: they can

increase their revenue, reduce their

costs, or use a combination of both

methods. If the cost of producing

goods or services can be reduced,

without negatively impacting

revenue, total profits will rise.

A good way to lower costs is to

simplify the method of production

by removing any expensive and

nonessential steps that will not

adversely affect the consumer’s

perception of the quality of the

product. More straightforward—

and therefore more cost-effective—

production methods have been a

goal for centuries. An early example

IN CONTEXT

FOCUS

Streamlining processes

KEY DATES

3rd century BCE The Romans

mass-produce lamps. Instead

of hand making them, they use

two-part molds.

1760 The Industrial Revolution

begins, moving from hand-

production methods to

specialized machines.

1730s US statesman Benjamin

Franklin writes about waste

reduction in industry in Poor

Richard’s Almanack.

1900s Ford revolutionizes car

manufacturing with mass

production and standardization.

2010 In The Art of Invention,

US inventor Steven J. Paley

states that it is easier to

innovate by adding complexity,

but the best results come

from simplification.