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by Jeff Moad, MA Editorial Staff Posted on Sunday, May 13, 2007 2:00:00 AM Sign Up to receive Daily News Alerts in your E-mail Inbox    | Abstract: | Manufacturing companies that have achieved a level of maturity in implementing continuous improvement programs such as lean and Six Sigma enjoy significantly higher growth rates and profitability than their non-lean counterparts, according to a recent study. |
| Keywords: | continuous improvement programs, Six Sigma, lean manufacturing, lean techniques, profit margin, lean manufacturers, inventory efficiency, inventory-to-revenue ratio |
Manufacturing companies that have achieved a level of maturity in implementing continuous improvement programs, such as lean and Six Sigma, enjoy significantly higher growth rates and profitability than their non-lean counterparts, according to a recent study issued by Manufacturing Insights, an IDC research company. Companies with relatively mature lean processes recorded 68% faster revenue growth over the past 20 quarters than non-lean companies, Manufacturing Insights reports. At the same time, lean manufacturers enjoyed net profit margins that averaged 26% percent higher than profit margins reported by manufacturers that haven't pursued lean practices. The study's findings were based on Manufacturing Insights' Global Performance Index, a group of 250 global manufacturing companies that allow the research company to track their financial performance. Manufacturing Insights compared results from Global Performance Index companies that use lean techniques with those that do not. The report states that lean companies generally report better financial results because they are structured to respond to demand, a capability that lets these manufacturers adjust more rapidly to market changes. Also, lean companies in the Manufacturing Insights Index generate greater profit margins because they are better at eliminating waste from their processes. [Click to continue] |
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