"Dollarizing" Lean Gains
I've a good friend who has many years of experience in manufacturingmanagement and leadership. He asked me if I had any "dollarized successstories".
It's an interesting question. When I get working with clients, they almost never push the issue of "impact of lean on top level metrics"...in fact, they sometimes push back when I suggest that we work to establish the link more strongly. I think there is the feeling that their existing data won't support such an analysis. Or if it does, they're just not interested in the labor it would take to do the analysis. (In other words, they take on faith, I guess, that reducing setup times is a good thing for their business but don't want to get into the hassle of figuring out how much impact a 50%reduction in setup time of their highest volume product or on their highest capacity production line would have on EBIT. When I was working with a box company, they had a machine on which they carried out over1000 changes a year. In many cases, they changeovers were twice as long as the run. It wasn't hard for me to figure out how much money each minute of changeover reduction was worth based on 1.) sales of the boxes that could be run in the saved time (which is important only if the machine is at full capacity, which it was) and 2.) charge rate of the machine. As you might imagine, both figures were reasonably large and senior management's response was, "Yep, that's some interesting information alright." And the subject never came up again. The point being, even when I showed them, using their own data, how much money they were making/saving, they were only mildly interested. )
While working with another company, I constantly had to push the whole issue of performance metrics. Early on, there was one metric that they were interested in....budget. Period. If you were under budget,you were OK. If you were over budget, your ass was grass. You could be the biggest dumbass in the company running a plant that looked like a Bankok brothel but, so long as you were under budget (or somewhere close), nobody bothered you. So, when we came in preaching teamwork,employee involvement, and world class performance, they looked at us like we were from another planet.
I went to the plant managers once to suggest that a good project might be working to make the metrics standard across similar plants. That idea went nowhere.
My point in all the rambling above is to say that, manufacturing managers, in my experience have been very hard to work with vis a vis pulling info together and figuring out the impact improvement initiatives have on their bottom lines.
It's an interesting question. When I get working with clients, they almost never push the issue of "impact of lean on top level metrics"...in fact, they sometimes push back when I suggest that we work to establish the link more strongly. I think there is the feeling that their existing data won't support such an analysis. Or if it does, they're just not interested in the labor it would take to do the analysis. (In other words, they take on faith, I guess, that reducing setup times is a good thing for their business but don't want to get into the hassle of figuring out how much impact a 50%reduction in setup time of their highest volume product or on their highest capacity production line would have on EBIT. When I was working with a box company, they had a machine on which they carried out over1000 changes a year. In many cases, they changeovers were twice as long as the run. It wasn't hard for me to figure out how much money each minute of changeover reduction was worth based on 1.) sales of the boxes that could be run in the saved time (which is important only if the machine is at full capacity, which it was) and 2.) charge rate of the machine. As you might imagine, both figures were reasonably large and senior management's response was, "Yep, that's some interesting information alright." And the subject never came up again. The point being, even when I showed them, using their own data, how much money they were making/saving, they were only mildly interested. )
While working with another company, I constantly had to push the whole issue of performance metrics. Early on, there was one metric that they were interested in....budget. Period. If you were under budget,you were OK. If you were over budget, your ass was grass. You could be the biggest dumbass in the company running a plant that looked like a Bankok brothel but, so long as you were under budget (or somewhere close), nobody bothered you. So, when we came in preaching teamwork,employee involvement, and world class performance, they looked at us like we were from another planet.
I went to the plant managers once to suggest that a good project might be working to make the metrics standard across similar plants. That idea went nowhere.
My point in all the rambling above is to say that, manufacturing managers, in my experience have been very hard to work with vis a vis pulling info together and figuring out the impact improvement initiatives have on their bottom lines.
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