What is the revenue source of Liusima Green Belt Project?

The revenue source of Liusima Green Belt Project consists of two parts, one part is the cost savings brought by reducing the inferior cost, and the other part is the value-added income brought by process optimization and product optimization design.

The law of enterprise existence is that income minus cost should be greater than zero.

Net profit = revenue-cost

Where cost = theoretical cost+inferior cost

Theoretical cost is the cost that must be consumed under the current production system. Lean design of Six Sigma project is to reduce the theoretical cost.

Inferior cost is the cost of not doing things well or being inefficient for the first time. Lean six sigma improvement project is to reduce or reduce such costs.

The inferior cost of lean six sigma includes the unqualified cost and the non-value-added part of the qualified cost in the traditional quality cost. Traditional quality cost is divided into qualified quality cost and unqualified quality cost. The cost of obtaining satisfactory quality is called compliance quality cost, including prevention cost and evaluation cost. Because the quality does not meet the requirements of customers, the loss cost is called unqualified cost, including internal loss cost and external loss cost. The so-called external loss cost refers to the loss caused by poor products at customers. Internal loss cost refers to the loss caused by bad things happening inside the organization.