Seven Ways to Reduce Cost
7 Ways to Reduce Cost
August 7, 2007 By Ron Pereira 4 Comments
I finished the book Gemba Kaizen by Masaaki Imai. It was quite good and I highly recommend it. It is chalk full of excellent tips like 7 ways to reduce costs in gemba (as Mr. Imai phrases it). They are: 1. Improve Quality: Imai stresses how good quality is a prerequisite to making lean work. He even speaks about things like control charts which you don’t find mentioned in many lean books. 2. Improve Productivity: Productivity improves when less input produces more output. The book stresses how freed up human resources should be used for more kaizen (not fired). 3. Reduce Inventory: Inventory can be nasty stuff if not controlled. It takes up space, slows cash flow, and all kinds of other nasty things. 4. Shorten the Production Line: Long, football field like, assembly lines need to go. When shortened we reduce all kinds of muda (i.e. transportation, motion, waiting, etc.). 5. Reduce Machine Downtime: Next to quality, Imai stresses an excellent Total Productive Maintenance program is essential to TPS. Like jidoka, TPM doesn’t seem to get the love it deserves from western lean practitioners. Not sexy enough I guess. Funny I mention this lack of love since I just realized I have never blogged extensively about TPM before. Guess I just found my next series topic! 6. Reduce Space: Imai estimates that most manufacturing companies use four times as much space as needed. Like long production lines using too much space invites muda (i.e. inventory) to come. When we free up space we should aim to add more capacity after getting after our sales force to get us some more business! 7. Reduce Lead Time: This is perhaps the funnest aspect of lean. We simply determine the time it takes between getting an order and collecting payment for the finished product… and then shorten it. Once we shorten it we do it again, and again, and again. And that, my good friends, is
August 7, 2007 By Ron Pereira 4 Comments
I finished the book Gemba Kaizen by Masaaki Imai. It was quite good and I highly recommend it. It is chalk full of excellent tips like 7 ways to reduce costs in gemba (as Mr. Imai phrases it). They are: 1. Improve Quality: Imai stresses how good quality is a prerequisite to making lean work. He even speaks about things like control charts which you don’t find mentioned in many lean books. 2. Improve Productivity: Productivity improves when less input produces more output. The book stresses how freed up human resources should be used for more kaizen (not fired). 3. Reduce Inventory: Inventory can be nasty stuff if not controlled. It takes up space, slows cash flow, and all kinds of other nasty things. 4. Shorten the Production Line: Long, football field like, assembly lines need to go. When shortened we reduce all kinds of muda (i.e. transportation, motion, waiting, etc.). 5. Reduce Machine Downtime: Next to quality, Imai stresses an excellent Total Productive Maintenance program is essential to TPS. Like jidoka, TPM doesn’t seem to get the love it deserves from western lean practitioners. Not sexy enough I guess. Funny I mention this lack of love since I just realized I have never blogged extensively about TPM before. Guess I just found my next series topic! 6. Reduce Space: Imai estimates that most manufacturing companies use four times as much space as needed. Like long production lines using too much space invites muda (i.e. inventory) to come. When we free up space we should aim to add more capacity after getting after our sales force to get us some more business! 7. Reduce Lead Time: This is perhaps the funnest aspect of lean. We simply determine the time it takes between getting an order and collecting payment for the finished product… and then shorten it. Once we shorten it we do it again, and again, and again. And that, my good friends, is