Oct 6 2013
I see three types of what Hela Hassine call “actions”:
- For some, you can do a complete discounted cash flow analysis before implementing. Cellularizing a job-shop falls into this category.
- For others, you cannot calculate the benefits ahead of time, but you can measure them afterwards. When you improve quality, first you can’t tell ahead of time by how much it will actually improve, and second, you can’t tell how much good this improvement will do to your business. After you have improved quality, you know by how much, and you can also measure the market impact of the improved quality, which is its dominant benefit. There is no way you can justify quality improvement ahead of time through cost-of-quality analysis.
- For the rest, the benefits are too diffuse to be measurable. 5S falls is in this category.
This has obvious consequences on implementation sequencing, that are often overlooked. Projects that lend themselves to a-priori justification are easiest to sell to management, and success in such projects gives you the credibility you need to undertake others with less tangible benefits. In other words, you are better off starting with cells than with 5S.