Do cost savings translate to real savings?

“If a tree falls in a forest and a no one is around to hear it, does it make a sound?” George Berkeley

When looking at process improvements we can use a similar analogy and say…. If we do cost savings and don’t re-allocate the resources, do we really save anything?

Many times, I have been asked to review a process, improve a product or find a different approach to a bottleneck without knowing the whole perspective. An improvement which saves resources is only cost effective if the resource you have reduced or saved is re-allocated.  Let’s look at some examples…

In a production environment a staff member was required to install a support on a mold with a clamp. This process then required another staff member to remove the clamp and support from the mold when the part was complete then transport them back to storage. By installing a system where the support is permanently mounted to the mold and can be pivoted out of the operating area when not required can offer large resource savings. The transportation of the clamp and support to and from storage, the time to locate the support on the mold and re-set the clamp versus pivoting the support into position takes significantly less time. You have saved time from the transportation and affixing the support but what is the resource now doing with the extra time? How can that time but used elsewhere or is the resource now with down time?

Ready for another example?

Data capture/transfer, employee accountability and material management are a few of the main reason’s companies implement travelers in production. Companies require the ability to track materials, put ownership to task and collect information related to the process or part being completed. The issue with this type of documentation is that many times the information is being collected and no one knows why or who uses it in the end. At one point a company’s traveler consisted of 12 unique pages which were reduced to 8 and then 4 standard pages which could be printed from 1 file. By implementing some additional processes to capture the necessary information and standardizing to one traveler a significant amount of time was reduced by eliminating the file complexity, file sorting and human errors. The resource completing the task of creating the travelers will now have more time to focus on other requirements…. what are those tasks? How have we saved?

Process improvements are imperative for continual success and increasing profits within any organization. Without reviews of the current systems, resources and requirements companies often live with the many band-aids they have gathered over time. Having the ability to complete improvements is a benefit for any organization but be cautious as many times those single focus progressions might not be saving the company anything overall! Is your company ready to save money through continuous improvements or just content with talking the lingo?