Benefits of Streamlined Operations

by Neil Kokemuller; Updated September 26, 2017
Engineer Teaching Apprentice To Use Milling Machine

Streamlining your business removes wasteful or redundant steps to improve efficiency. Streamlining may involve modernization of your equipment, outsourcing organizational activities, and minimizing low-performing products and services to focus on what your company does best. In business, time is money, so a small business achieves several financial and operational advantages from streamlined operations. You reduce costs, attract more customers through nimble response times, drive higher revenue and compete effectively.

Better Financial Performance

When you cut wasteful steps and positions, the salaries you pay workers can be reassigned to profitable production activities. You avoid wasting money on equipment, tools, supplies and resources that don't contribute to profitable tasks. Your products reach customers quickly when demand is highest, and you attract more customers because of an efficient operation. High revenue and low costs means improved profitability and cash flow.

Faster Response Times

A streamlined operation leads to faster response times and makes your business adaptable and flexible. A company with a streamlined process is better able to modify production on the fly to satisfy a customer while maintaining profitability. Response times on special orders improve with streamlined operations as well. Retailers used to offer a four- to six-week turnaround on custom orders. As of 2014, that doesn't work. Customers expect rapid response in as few as one or two days.

Optimized Resource Allocation

Since streamlining reduces waste, it results in better resource allocation. Businesses can use enterprise resource planning tools to avoid redundant supply orders across departments and minimize excess inventory. With streamlining, you allocate your best people, equipment, tools and supplies to the most profitable projects and activities. When it takes 8 days to complete processes that once took two weeks, you gain several days in which resources are allocated to other profitable activities.

Competitive Strength

Companies in a given industry watch what the most successful companies do and mimic it. In some cases, streamlining is necessary to compete. A competitor that cuts production or process times in half has a significant advantage if you do nothing. It is better to take the lead in streamlining, but keeping up with top competitors is important. You avoid losing customers to businesses that serve your customers needs more flexibly and efficiently than you can.

About the Author

Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.

Photo Credits

  • monkeybusinessimages/iStock/Getty Images