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How do you prioritize capital equipment projects based on value stream mapping and customer needs?

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Lean six sigma is a methodology that combines two approaches to improve processes and reduce waste: lean and six sigma. Lean focuses on eliminating non-value-added activities, while six sigma aims to reduce variation and defects. In this article, you will learn how to apply lean six sigma principles to capital equipment projects, which are large-scale investments in machinery or technology that enhance production capacity or quality. You will also learn how to prioritize these projects based on value stream mapping and customer needs.

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1 Value stream mapping

Value stream mapping is a tool that helps you visualize the flow of materials and information from the supplier to the customer. It helps you identify the value-added and non-value-added steps, as well as the sources of waste and inefficiency. By creating a current state map and a future state map, you can compare the current and desired performance of your process and identify the gaps and opportunities for improvement. Value stream mapping can help you decide which capital equipment projects are most aligned with your strategic goals and customer requirements.

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2 Customer needs

Customer needs are the expectations and preferences of your external or internal customers. They are the basis for defining the value and quality of your products or services. To understand your customer needs, you need to collect and analyze data from various sources, such as surveys, interviews, feedback, complaints, and market research. You also need to segment your customers into different groups based on their characteristics and needs, and prioritize them according to their importance and satisfaction. Customer needs can help you determine which capital equipment projects are most likely to increase customer satisfaction and loyalty.

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Jamie Grimshaw

Experienced Managing Director at Erbe Medical | Driving Medical Technology Growth & Innovation | Strategic Visionary & Team Leader | Mental Health Champion
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In my experience some customers know their superficial needs quite well, but customers often have deeper, more emotional needs that pull harder than the superficial stated ones. There are also many unknown unknowns, or “black swans” that at the time of interaction neither you nor your customer knows. These are the true golden tickets to success. If you support a customer in identifying an unmet need that they and you didn’t know when entering into the conversation then you unlock untold value that will often drive a customer to act.

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3 Lean six sigma tools

Lean six sigma tools are techniques that help you implement the lean six sigma methodology and achieve your improvement goals. Common tools include 5S, a method to organize and standardize your workplace; DMAIC, a structured problem-solving approach with five phases; SIPOC, a high-level map of Suppliers, Inputs, Process, Outputs, and Customers; FMEA, a risk assessment tool that evaluates Failure Modes, Effects, and Criticality of a process or product; Pareto chart, a graphical tool showing the frequency and impact of different causes of a problem; and CTQ tree, which translates customer needs into Critical To Quality characteristics that can be measured and controlled.

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David Newton, MBA

Catalyst for Change in Healthcare Capital Planning and Sourcing
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Capital equipment planning often gets mired in manual, time-consuming processes. The key to modernizing this? Technical enablement. By centralizing capital data in a platform that cleanses, normalizes, and maps it efficiently, the entire process transforms. Tools for requests, approvals, budgeting, and prioritization built into this system mean less reliance on slow, manual input and more on fast, accurate technology. This shift not only speeds up capital management but also enhances decision-making precision. Technical enablement allows teams to move beyond administrative tasks, focusing instead on strategic growth and innovation.

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4 Capital equipment selection

Capital equipment selection is a process that requires careful consideration of several factors to choose the best alternative among several options of capital equipment projects. Evaluating the costs, benefits, risks, and feasibility of each option and comparing them against the criteria and constraints of your organization is essential. This includes taking into account the return on investment, payback period, net present value, internal rate of return, and break-even point for each project. All these factors should be carefully weighed to make an informed decision that will generate the most net income for your organization.

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Frank Nickells

CBET e
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In my experience, one must first review the capital equipment request and then review your group provider listing ( such as HPG). Many times the particular equipment requested is not the requested make/model of the buying group, and considerable more research must be done to go sole source.

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5 Capital equipment implementation

Capital equipment implementation is the process of executing a selected capital equipment project and ensuring its successful integration into your existing process. This includes planning, designing, testing, installing, commissioning, training, and monitoring the new equipment and its performance. To ensure success, you must define the scope, objectives, schedule, budget, and roles and responsibilities of the project team and stakeholders. Additionally, a feasibility study and risk analysis should be conducted to identify potential challenges and mitigation strategies. The layout, specifications, and requirements of the new equipment must be designed alongside its interface with existing equipment and systems. Moreover, the functionality, reliability, safety of the new equipment must be tested to verify its compliance with standards and regulations. After installation and commissioning of the new equipment, it must be properly operated and aligned with process parameters and goals. Operators, technicians, and managers should also be trained on how to use, maintain, and troubleshoot the new equipment. Finally, it is important to monitor and evaluate the performance, quality, efficiency of the new equipment in order to gauge its impact on process outcomes and customer satisfaction.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Jamie Grimshaw

Experienced Managing Director at Erbe Medical | Driving Medical Technology Growth & Innovation | Strategic Visionary & Team Leader | Mental Health Champion
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Other elements to consider are: 1. The businesses purpose and how it aligns with what your business and what you can offer. Alignment with the customer’s “why” turns a transactional situation into a partnership. 2. The decision makers - its key to understand who has power and who has interest. Mapping these people and understanding what their needs are is critical in running an effective capital process. 3. Pitfalls and land mines - helping a customer avoid major issues often ensures a high degree of post implementation loyalty. Typically customers undertake a major capital project once in a while, as the expert in the room, the sales person is able to offer a unique perspective to support the customer’s journey through their project.

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How do you prioritize capital equipment projects based on value stream mapping and customer needs?

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1 Value stream mapping

2 Customer needs

3 Lean six sigma tools

4 Capital equipment selection

5 Capital equipment implementation

6 Here’s what else to consider

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