The Idiot Index by Elon Musk

The “Idiot Index” reveals the hidden inefficiencies in your business processes.

It measures the disparity between the final product’s cost and the combined cost of its basic components.

For example, if the cost of a final product is $100, while the components cost $5 in total, the Idiot Index is high signaling a substantial profit leakage within your supply chain.

This implies that your business is bleeding profits due to inefficient sourcing, production, or distribution methods. The higher the Idiot Index, the more urgent the need for action.

In that case, you need to find a solution e.g

👉 renegotiate procurement terms to secure better deals on components
👉 re-evaluate your manufacturing process to streamline costs,
👉 or even bring a portion or the entirety of the production process in-house.

Don’t let inefficiencies erode your profits.

Start using the Idiot Index in your business today.