The Lean Six Sigma Guide to Doing More With Less: Cut Costs, Reduce Waste, and Lower Your Overhead

Chapter 5. Measure Process Efficiency

Finding the Levers of Waste Reduction

With Stephen Clarke

An e-commerce website was starting to feel drowned by the creative burden of producing new ads each week. From start to finish, the process took about 4 months. At any given moment, there were about 180 unique ads in development, with about 45 new ads required each month.

One of the first lessons this company learned after adopting Lean Six Sigma was that slow processes were expensive processes. So company managers had to ask themselves whether there was a way to cut time—and cost—from this process.

The first clue came when they constructed a value stream map (as described in Chapter 4) and completed the value-add analysis portion of the procedure. The company realized that there were only 15 days of value-add work in the 120-day process. In other words, 105 days of the cycle time (just under 90 percent) was wasted time from the clients' perspective. They approached the task of improving the efficiency in stages, and over a period of 6 months had cut the lead time to just 60 days—and cut the cost to run the process the equivalent of $350,000 annually.

This company was in a common position. It had a process that felt like it took forever to complete and was unnecessarily complicated. With the tools described in this chapter, it was able to convert that feeling into data and discover a relatively simple way to cut process time in half—which led to dramatic cost savings as well.

In this chapter, ...