Your Lean journey milestones can be measured. Lean outcomes must be measured. Lean leadership should expect significant, enterprise-wide improvements. A well-conceived, well-executed Lean transformation will result in the following:
- Quality: External quality as seen by the customer; internal quality such as reworks, rejection, redos, supplier quality. Quality should improve by a minimum of 50% per year outputs.
- Productivity is outputs divided by inputs, such as parts produced per hour. Productivity increases should be 2% per month, or 28% per year on a compounded annual basis the first year.
- Floor and office space should be reduced by 50%–70% in one year.
- On-time delivery to customer request should exceed 98%.
- Inventory should turn fifteen times per year within the first two to three years.
- Supplier base should be reduced by 50% within the first two years.
- Profits should increase by 100%–200% by year three.
Accurate outcomes can be developed for individual organizations in any industry. Your investment in lean should provide a twenty to thirty times ROI over the course of three years.
This blog is adapted from my new book(in stores now) on how any company can turn inevitable waste into cash. Stay tuned for continuous blogs on how to “Turn Waste into Wealth” at my website: www.markdeluzio.com.