To what extent can improvements in productive flow and product quality lead to an increase in sales and profit?
Both of the sales and profit are the most crucial factors in the operating of a business. High sales and profits help the business to keep operating so that is the reason why businesses are continually seeking methods to increase the sales volume and profits. Sales volume depends on a variety of factors such as the product pricing, the feature of the product, advertising intensity etc. Profits lie on the sales volume, product pricing, cost of sales, internal expenses etc. Product pricing is the most pivotal element which impacts both sales and profits in significant measure. Cheaper pricing makes the more competitive power of the product, helps more sales but needs lower costs as well; this stimulates more gross profit of the business. Basically reducing labour costs or cutting cost of goods manufactured is the simplest method to achieve this goal. However these sorts of methods would influence the quality of products then lead low quantity of sales. The best idea to gain high sales and profits is promoting the productive flow. An effective productive flow can maintain high quality of the product and decrease the costs on producing at the same time. In the following context of this article, I will use the example of Toyota Production System (TPS) to illustrate how the improvements in productive flow and product quality give rise to the enhancement of sales and profit.
As we all known, in the 1910s Henry Ford developed the Taylors’s scientific management to a new type productive flow which was called assembly line. The cars of Ford were arranged and produced in a logical order. “Ford eliminated labour with new machinery to reduce the labour costs and improve the efficiency; used technology to mechanize the work process and works are fed by machines; the speed of the work was set by the machinery – the speed of the...
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