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In real terms profit is the difference between the sale of a product and the cost incurred making that product. In every business there are two types of cost, fixed or semi -fixed costs (e.g. buildings, machinery, wages, equipment etc.) and totally variable costs (e.g. the materials required to make the products. (e.g. paint, parts consumables etc.)
Profit is measured by subtracting the amount of fixed and semi-fixed costs from the total sales value. Totally variable costs are not measured in this calculation as they are simply elements that just pass through your business.
One of the results of working with Bodyshop Alliance and in implementing the Lean-Flow bodyshop system is the increase in throughput capability. Where fixed and semi-fixed costs remain static, then the increase in profitability is emphatic.
This video illustrates what happens to profit when only a 15% in throughput is achieved. The profit available per repair has become exponentially higher because all of the fixed and semi-fixed costs have been covered.