Tuesday, June 22, 2010

What are the benefits of Lean and how long will it take to see results?

The kaizen team should expect to see measurable improvement and bottom line impact following each weekly kaizen event. Typical results of a kaizen event include:


Hard Savings (direct P&L impact)

• Inventory (working capital) reductions of +75%.
• Cycle time reductions of 50% - 90%.
• Delivery lead-time reductions of 75%.
• Productivity increases of 15% - 35% per year.
• Defect reductions of 50% per year, with zero defects performance possible.

Soft Savings (usually less immediate direct impact)

• Space savings up to 50%.
• On-time delivery improvements of 99+%.
• Improvement in employee survey results.

During the lean assessment phase of a potential engagement (see question 10), Gembutsu identifies specific savings targets to be accomplished during a company's lean transformation. In most cases, these are annual targets. Each kaizen workshop must bring the company closer to this goal.

Gembutsu guarantees delivery of the financial results agreed upon during this assessment. These are regularly monitored throughout the engagement.

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