WSJ.com – For Caterpillar, Commodity Boom Creates a Bind

WSJ.com – (Subscription Only)

A reminder that profit = price – cost, where the price is set by the market (not the old approach of price = cost + profit). Sure you might be able to increase your selling price, but that's based on customer demand. Suppliers might have the same leverage over you to increase raw material cost, as is happening with Caterpillar. Only by reducing their own internal costs, and by helping suppliers do the same (as mentioned in the article), can you improve your profit. Don't rely on price increases or squeezing your suppliers to cut costs the wrong way.

What do you think? Please scroll down (or click) to post a comment. Or please share the post with your thoughts on LinkedIn.

Don't want to miss a post or podcast? Subscribe to get notified about posts via email daily or weekly.

• About
• Latest Posts

Mark Graban

Mark Graban is an internationally-recognized consultant, author, and professional speaker who has worked in healthcare, manufacturing, and startups. His latest book is Measures of Success: React Less, Lead Better, Improve More. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. He also published the anthology Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also a Senior Advisor to the technology company KaiNexus.

Latest posts by Mark Graban (see all)

• How to Create a Continuous Improvement Culture by Closing the GAPS — with Katie Anderson - March 30, 2023
• Interview with Mit Vyas: Insights on Learning from Toyota, Entrepreneurial Success, and Mindfulness Practices - March 29, 2023
• Recorded Webinar on Building a Culture of Continuous Improvement through Organizational Habits - March 22, 2023