We help our clients maintain their bottom line through operational cost reduction projects focusing in on the three basic drivers of cost: materials, labor, and overhead. Using internationally proven methods and techniques from Lean, Six Sigma, and Theory of Constraints, our consultants focus in on the following areas to help reduce your operational costs.
Quality Improvement: Remember leading with quality? We often say that quality is more than meeting requirements. It also makes good business sense. This is painfully – and expensively – evident when a product or service is returned by the customer for not meeting their expectations – or worse, is never sent due to poor quality. We assess the Cost of Quality (COQ) and help develop and execute strategies and projects to improve quality and optimize the balance between the Cost of Good Quality (Prevention and Appraisal costs) and the Cost of Bad Quality (Internal and External Failure costs). We employ Six Sigma methods and tools to help reduce variation and assure conformance.
Value Stream Mapping: While Value Stream Mapping is first employed to help improve delivery of your product or service, the non-value added activities add operational costs that your customer does not want to (nor should have to) pay for. Therefore, we also utilize Value Stream Mapping to identify and eliminate these costs. By reducing or eliminating these non-value activities, our clients enjoy a double benefit of increased speed and decreased costs leading to happier customers and higher profits.
Constraint Management: When not managed properly, operational constraints can cost an organization precious time and money. For every lost unit at the constraint operation, additional costs must be incurred to make up for lost time. Other costs, such as increased inventories, scrap/rework, appropriately managed premiums, and expediting fees are typically associated with mismanaged constraints. Identifying the constraint isn’t always easy but neglecting it is futile! We can quickly identify the constraint, maximize the output given current resources, and develop and implement solutions to alleviate the constraint.
Lead Time Reduction: Time is money! The longer the lead time, the more time it takes for you to deliver to your customer and for you to get paid. Reduce the lead time and increase the velocity of revenues coming into your business. Together with Value Stream Mapping and Waste Walks, we quickly identify the non-value added activities and work with you to eliminate or at least reduce these cash drains, sending that money straight to your bottom line.
Utilization Optimization: Labor, equipment, and space are the top 3 resource costs we consistently find among our clients. We also find that most organizations grossly underutilize these most valuable resources! Resources. Fortunately, quantifying the underutilization and tapping into this additional capacity is typically straight forward. Using a combination of methods and techniques from Lean makes this an area of “low hanging fruit” that we can often tap into as a cash reserve to fund other continuous improvement efforts.