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Lead Time Reduction

Six Sigma – iSixSigma Forums Old Forums Finance Lead Time Reduction

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  • #24179

    Isabel
    Participant

    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

    0
    #57992

    iwb
    Participant

    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?
    etc.
    On the main site last week somebody gave a very useful link to a “ask 5 times why” template:
    https://portal.covisint.com/wps/public/lang/en/.cmd/ActionDispatcher/_pagr/110/_pa.110/126/.piid/215/.ciid/286/PC_215_DetailEvent/yes?cmdocid=aa8e7bdf986d903cda1fadf0a12c8fe8
    Download appendix 41, which is:
    https://portal.covisint.com/wps/cmimages/4c8e6e14d0cfe0be90e12ef55296b0ca
    This should help you making progress. Please visit our website http://www.mprv.biz/iwb/glossary/iwb_glossary.html 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)
    AND
    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])
     

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    #57993

    iwb
    Participant

    Isabel,
    Sorry, the document is found at:
    https://portal.covisint.com/wps/cmdocs/7e76a97a778422e5c5ba25749e30e8c4
    The other URL is just the icon image.
    iwb.
     
     

    0
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