Lead Time Reduction

Six Sigma – iSixSigma Forums Old Forums Finance Lead Time Reduction

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    I am in the process of reducing the lead time of an order
    entry process, we are at the definition phase. However one
    of our problems is that our finance department is having
    difficulties to estimate the cost savings of the project and
    the ROI.Does anybody have any ideas, I would appreciate any
    input regarding how to estimate ROI for Lead Time
    Reduction Projects.Best Regards



    Hi Isabel,
    I think lead time and through put are directly related:

    a big lead time will process almost no order
    a very small lead time will allow processing the input rate of orders without any delay.
    So I think focusing on through put (e.g. potential orders within a month or quarter) will give you the answer.
    Which brings me to the question: why isn’t your finance department able to estimate the savings?

    is it a difficult subject?
    are they unwilling to do it?
    On the main site last week somebody gave a very useful link to a “ask 5 times why” template:
    Download appendix 41, which is:
    This should help you making progress. Please visit our website when you face a very difficult problem to solve, like a trade-off situation. For example you may face a situation where:

    lead time should be small (to improve the business)
    lead time should be not-small (big) (e.g. because it is wise to stay with the current organisation for the time being)
    How to make progress in a situation like this?
    We can show you, how.
    Best regards and good luck, iwb  ([email protected])



    Sorry, the document is found at:
    The other URL is just the icon image.

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