Process Improvement

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Production process improvement



Recently, I have made a change to my production area by aligning the packing machine section and this inturn reduced time, people. But, i am not very sure how to calculate this in terms of cost and present to my management as a Lean Initiative
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did you calculate the cycle time prior to the change? easiest way would be to calculate reduction in cycle time, multiply that with an average hourly rate of resources and get a cost estimate.
if you have the data you can also show how cycle time compares to takt time before and after the change.
have you also reduced WIP as part of this initiative? would be good to show reduced WIP levels too

/sd
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2 replies by Muthukrishnan Ramakrishnan and Nancy Avila
Jan 30, 2018 10:10 AM
Muthukrishnan Ramakrishnan
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No I've not calculated yet. Thanks for your suggestions
Feb 14, 2018 3:31 PM
Nancy Avila
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I would also recommend you to add the cost saving from inventory carrying cost. Using your company product cost structure as a guideline would be very helpful with your quest to present the cost saving from the lean initiative.



Jan 30, 2018 9:33 AM
Replying to Sromon Das
...
did you calculate the cycle time prior to the change? easiest way would be to calculate reduction in cycle time, multiply that with an average hourly rate of resources and get a cost estimate.
if you have the data you can also show how cycle time compares to takt time before and after the change.
have you also reduced WIP as part of this initiative? would be good to show reduced WIP levels too

/sd
No I've not calculated yet. Thanks for your suggestions



+1 Sromon. This is where you find the value of modeling the AS IS and the TO BE processes. This normally also provides you with the motivation for a business case to implement a significant change. During the modeling, you do process validation, time, resource and cost analysis for both AS IS and TO BE.



As mentioned in earlier comments, you need to look into the Cycle time (now and earlier).
Some other aspects that could be calculated are
1. People - reduction in resources & reduction in cost
2. Floor Space/ Plant Layout - this ties in with the Plant Productivity
3. Process improvements - bringing the packing machine closer might mean defects get identified early etc etc.
...
1 reply by Muthukrishnan Ramakrishnan
Feb 14, 2018 8:28 PM
Muthukrishnan Ramakrishnan
...
Yes, noted your inputs

Jan 30, 2018 9:33 AM
Replying to Sromon Das
...
did you calculate the cycle time prior to the change? easiest way would be to calculate reduction in cycle time, multiply that with an average hourly rate of resources and get a cost estimate.
if you have the data you can also show how cycle time compares to takt time before and after the change.
have you also reduced WIP as part of this initiative? would be good to show reduced WIP levels too

/sd
I would also recommend you to add the cost saving from inventory carrying cost. Using your company product cost structure as a guideline would be very helpful with your quest to present the cost saving from the lean initiative.
...
1 reply by Muthukrishnan Ramakrishnan
Feb 14, 2018 8:28 PM
Muthukrishnan Ramakrishnan
...
Yes. Thanks for your feedback



Feb 14, 2018 10:32 AM
Replying to Venkata Naga Rahul Rani
...
As mentioned in earlier comments, you need to look into the Cycle time (now and earlier).
Some other aspects that could be calculated are
1. People - reduction in resources & reduction in cost
2. Floor Space/ Plant Layout - this ties in with the Plant Productivity
3. Process improvements - bringing the packing machine closer might mean defects get identified early etc etc.
Yes, noted your inputs



Feb 14, 2018 3:31 PM
Replying to Nancy Avila
...
I would also recommend you to add the cost saving from inventory carrying cost. Using your company product cost structure as a guideline would be very helpful with your quest to present the cost saving from the lean initiative.
Yes. Thanks for your feedback

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