Measuring Improvement

One of the most common (and frustrating) problems for the staff lean practitioner is being asked to “measure the savings” resulting from specific improvements.

(This problem is related to, but different from, trying to measure “lean progress” or the status of implementation.)

There are two issues in play here.

First is the level of understanding in the leaders who ask for this in the first place. Frankly, it isn’t their fault. Authors, consultants, and practitioners have been “selling” the concept of “lean production” as a stand-alone thing to do for decades.

It is really easy, in the initial excitement of grasping the potential, to just try to push the tools and promise that great savings will result from simply implementing them.

The initial literature was all about describing the performance of benchmark companies (like Toyota, though there were others), describing the visible tools and saying, in effect, “if you just implement these tools, you’ll get this kind of results.

But making these changes can be expensive. The obvious costs are consulting fees, time (perceived to be) taken away from production work. Therefore, there must be a sufficient ROI to “justify” making the changes.

For the practitioner, the countermeasure is to try to shift the focus to establishing a business objective first.

This shifts the conversation from “justifying improvement” to “what problems must we solve to hit the objective?”

The financial evaluation then shifts from "justifying moving beyond the status-quo” to evaluating alternative solutions to the problem.

If you ask directly, most managers will have things in mind that they would like to do better. The challenge is to get those things framed in enough detail that some value is created for actually getting there.