“I have to lay off employees.” “My production is down and waste is up.” “My competitors are beating me but we have the exact same product.” “Why won’t these people do a better job?” Sound familiar? I have been a part of leadership in organizations, for a long time, and in several organizations. I have heard all of these expressions and more. All similar in one respect. The solution to preventing or correcting each of them can be found in the same place – Leadership. To paraphrase an old axiom I learned in the Army, “Leadership is responsible for everything that does or does not happen in their area of responsibility.” Yes, leadership is responsible.
One of the bigger issues I see Small Business Owners struggle with is how to price their product or services. They have a price, often calculated on materials and labor, but it isn’t giving them a profit. So they artificially create an “add-on” profit” charge for their product or service.
At one time or another you might have heard the word “Value Stream”. A Value Stream is every single step in the end-to-end process for creating a Product or completing a Service from the moment of Order Entry by Customer Service, to the ordering and delivery of Supplies, through the end-to-end cycle time to make or complete the product, to Packaging, Labeling, and Delivery to the hands of the Customer. There is a Value Stream for each and everything you make or sell.
What’s a Value Stream?