0

Financial impact of adopting it

Significant benefits can be realised, sustained and continuously improved: quality

saves money

Examples of achieved benefits from LeanSome examples of financial benefits

■ During the period 1996 – 1998 General Electric (GE), the world‟s well-known

user of Lean, invested about 1billion dollars in adopting the approach. Their

earnings in the same period were 1,75 billion

dollars. The ROI-period was 9 months

■ For Motorola, one of the founders of Six Sigma, the ROI took 2.5

year, but the effect was even larger: 2.2 billion

dollars

■ The Bank of America stated in 2004: “since launching our Lean efforts less

than 3 years ago, we’ve saved hundreds of millions of

dollars in expenses, cut cycle times in numerous areas of the

company by half or more and improved the percentage of customers who rate

their satisfaction at 9 or 10 on a 10-point scale form 41% to more than 50%, an

increase of almost 2,5 million customers”

■ Red Cross Hospital Beverwijk saved €310,000 in

their first half year of working with Lean (September 2002 – February

2003)

■ Philips Lighting saved more then € 2 billion in Black

Belt projects since the start of the program

Achieved

Short term

Long term

85%

185

100

22

13

50

0 50 100 150 200

Potential

productivity

Better value chain

alignment

Flexible planning

Smarter process

Productivity at

start pilot

Productivity

■ Stork Fokker reported a decrease in work in progress of 80% and a cycle time

improvement of 25% at the production of Cessna-airplane tails by using Lean

Manufacturing

■ Boeing has implemented a Lean program years ago and gains high savings and

higher employee satisfaction

■ Toyota has developed his own Lean derivate, this has made it one of the biggest

automobile manufactures in the world, with high quality products

1

In practice: financial impact of adopting it

Significant benefits can be realised, sustained and continuously improved: quality

saves money (cnt´d)

Process redesign

■ Measurement and

analyse

■ Definition of „waste‟

■ Design new

process

■ Implement new

process

Continuous

improvement

■ Continuous measurement,

analysis and control

■ Proactive employees

■ Makes use of the

knowledge in the

organisation

Structural EBIT

improvement

through cost

efficient

processes