Are you Getting Lean Fast Enough?
Framingham, MA - March 30 2005 –
How can a company gauge whether it’s getting ahead or falling behind in its Lean manufacturing initiative? One place to start getting answers to these questions would be to “benchmark” your improvement track record to some general Lean performance criteria to get the thought process of the entire management team into action.
Lean expert Mike Donovan believes many manufacturers are turning to Lean manufacturing techniques to drive out waste and dramatically improve cycle time, productivity, inventories and delivery. “Although Lean manufacturing can achieve significant cost savings in the form of reduced inventory costs and improved productivity, the more significant strategic advantage comes from revenue building opportunities as customers respond more favorably to lower cost, flexible and responsive manufacturers.”
For companies striving to become Lean, one challenge is figuring out where they stand and where to go next in their pursuit of excellence. Donovan suggests a simple self-assessment. “Company executives should have the entire management team answer and discuss the following questions to benchmark performance improvement progress:
1. Have we reduced our total order to cash cycle time by at least 50% over the past 3 years?
2. Have total inventories decreased by at least 50% over the past 3 years?
3. Do 99% or more of our orders reach customers as they requested?
4. Our supplier base has been reduced by 2/3 or more over the last 5 years?
5. Our supplier lead times have been reduced by 50% or more over the past 3 years?
6. Have we reduced scrap, rework and warranty costs by at least 50% over the past 3 years?
7. Has our cost to produce decreased by 20% or more over the past 3 years?
8. Have we reduced our cost of quality by at least 50% over the past 3 years?
9. Have we reduced direct material costs by at least 10% over the past 3 years?
10. Have we reduced our product development cycle time by at least 50% over the past 3 years?
If you answer NO to any of these critical questions, it’s a solid indicator that you’re not progressing as fast as you should be. The total “cost of ownership” for materials and products will become more of the guiding metric for astute buyers.
- Contact Information
- Mike Donovan
- Managing Partner
- R. Michael Donovan & Co.
- Contact via E-mail
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