How much does a lean journey cost?

"Get to the bottom line...how much is this going to cost me?".  This question should be asked by anyone serious about a lean transformation.  We have the answer in this entry in our Gemba Talk series.

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How will we pay for this?

When starting out, the costs of lean are not yet built into your operational structure.  The costs of training, hiring skilled personnel and just allotting the time to make improvements factor into those up front investments.  Because of those costs, you need to ask "What results can I expect?".  At 01:00 in the video, we start to get some answers to this question.

In general, how much you can improve depends upon your current state.  If you have built up inventory, are taking weeks to deliver your products or services to customers that are produced in hours, are burdened by rework or overtime, you should not be surprised to see significant gains.  Imagine a 90% reduction in inventory, reducing lead times from weeks to days and double digit cost reductions!  What would your organization look like with such results?

What other benefits are there?

Beyond operational benefits like changing from batch and queue production, to flow and pull, you can expect results in other areas as well.  At 01:55 in the video we learn some of those benefits.  Over 50 years into their lean journey, Toyota still sets aggressive targets in cost reductions and often achieves them.  This is simply a benefit of an improvement culture where everyone in the organization is involved and onboard with the process.  A strong culture can allow you to outperform and therefore outlast your competitors who are not working hard at improving their business.

So how much does building a lean culture cost?  It may be time to start asking "How much is it costing us to NOT build an improvement culture?"


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