You do some improvement activities to eliminate wasteful activities like sorting, expediting, or grouping similar machines together in “process villages.”
Then, finance or senior management asks for the financial value of those activities.
“There is none,” says author, lean practitioner, and former CFO Jean Cunningham. Such activities, by themselves, don’t create financial value. But they do create something potentially even more valuable.
“They create capacity,” she explains. “They create the opportunity to use the time and the talent and the genius of our employees on something that matters more to our customers.” And that’s the trick.
In this nine-minute Lean Talks video, she explains the five ways lean makes money for businesses. Jean then goes deeper into one of them – added capacity – to give you ideas for making it pay off.
0:55 – How business makes money; chart
1:40 – 5 ways lean influences making money
3:44 – Struggling with capacity creation
4:37 – How to use added capacity to free up people
7:25 – Spreading the benefits
8:37 – Win-win
Are you interested in learning from lean practitioners and pioneers like Jean?
The pilot Lean Talks session at the 2017 Lean Transformation Summit was a hit, so we’re bringing it back for the 2018 Summit.
Join thought leaders like Jean and John Shook, who helped Toyota transfer its production and management systems from Japan to the U.S., for succinct, 10-minute presentations tightly focused on one critical topic. And Jean returns for a talk on Value-Based Activities Using Financial Information
Save your seat now for Lean Talks, Monday evening, March 26, and register for the 2018 Lean Transformation Summit. Jean will also teach Capturing the Value of Lean at LEI’s Seattle workshops on April 16.