Like it or not, many senior managers look to the bottom line with regards to any new project. While 5S should never be considered a project we all know it's easily considered as such. 

With that in mind, for those of you that do measure 5S return on investment (ROI) how do you do so? 

Thank you,

David Visco

5S Best Practices

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Hi David,

Here in Europe we make by saved space in square meter (after 1.S) or less time to look and seek your tools and equipment.

Kind rgds

Erwin Studer

Hi,

At my workplace we have a practice of measuring:

1. money generated after 1S

2. space saved

3. reduction in employee attrition ratio

4. Savings made through reduction in set-up times, other cost saving initiatives.

All this together makes return on investment measurement for us. Give your guidance/suggestions on this.

Regards,

Hemang

Hi Hemang and Erwin,

Thank you for the input. 

Both of mentioned space saved as a result of Sort. Is this an annual measure? How much have you saved? 

Hemang mentioned attrition reduction - I'm curious as to how you attribute that directly to 5S. 

Thank you for your contribution.

David Visco

5S Best Practices

Hi David,

we measure space after 2S step. We have saved 500 sq ft.

Attrition reduction we measure as one of benefit of 5S because we consider comfort and ease of work increased after 5S. Clean and better environment attracts workers to stay with organization, instead of working with organizations where working environment is not so good.

Hello,

We just started a 5S rollout at our testing lab company and we will do 2 day implementations at many different labs across the US and the globe.

To start, we will be measuring a few basic items;

Reclaimed space (including lab bench tops which will allow for new growth)

# of Safety violations observed during the "Waste Walk". Hard to measure the dollars but it is savings through cost avoidance if non-conformances are corrected.

Re-allocation of idle assets to different sites. Another cost avoidance where another lab (branch) will not make an expenditure to purchase equipment and instead take transfer of same type equipment from another company location.

Despite these, we expect senior management to be looking for harder measurements for ROI.

Thanks,

Joe

Keeping a purchase block at other branch if one branch have excess inventory of same item in idle state. That is a good practice.

Joe Glennon said:

Hello,

We just started a 5S rollout at our testing lab company and we will do 2 day implementations at many different labs across the US and the globe.

To start, we will be measuring a few basic items;

Reclaimed space (including lab bench tops which will allow for new growth)

# of Safety violations observed during the "Waste Walk". Hard to measure the dollars but it is savings through cost avoidance if non-conformances are corrected.

Re-allocation of idle assets to different sites. Another cost avoidance where another lab (branch) will not make an expenditure to purchase equipment and instead take transfer of same type equipment from another company location.

Despite these, we expect senior management to be looking for harder measurements for ROI.

Thanks,

Joe

Hi Joe,

Great response. I really like the # of safety violations metric. Can I assume you had a baseline number to allow you to track the improvement? 

Reallocation of assets to other sites is a great way of incorporating 5S across different locations. Great!

Its important to remind Sr. Management that the goal of 5S is not ROI, it's to make it easier to see waste so that you can improve the operation and thus be more competitive and responsive to your customers. 

Thanks again

David Visco

5S Best Practices

Joe Glennon said:

Hello,

We just started a 5S rollout at our testing lab company and we will do 2 day implementations at many different labs across the US and the globe.

To start, we will be measuring a few basic items;

Reclaimed space (including lab bench tops which will allow for new growth)

# of Safety violations observed during the "Waste Walk". Hard to measure the dollars but it is savings through cost avoidance if non-conformances are corrected.

Re-allocation of idle assets to different sites. Another cost avoidance where another lab (branch) will not make an expenditure to purchase equipment and instead take transfer of same type equipment from another company location.

Despite these, we expect senior management to be looking for harder measurements for ROI.

Thanks,

Joe

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