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  • #53967

    Russ
    Member

    I am attempting to sell the idea of implementing a lean six sigma program within my company. One recurring question is will there need to be a reduction in work force. I do not foresee this being the case and was wondering how common a reduction in workforce has been once a lean six sigma program becomes well established at a company.

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    #192320

    Mike Carnell
    Participant

    You are getting that comment, most likely from an older employee or an accounting person, who has no idea how to reduce cost without cutting headcount. Gary Cone and I did an implementation where we wrote it right into our contract that there would not be any headcount reductions.

    When I did the deployment in South Africa we were tasked with delivering R200,000,000 (about $33,000,000 USD). I remember one of the accounting guys asking me why we thought it was possible because the mine payroll wasn’t that high. We delivered R206,000,000. We were audited by Earnst &Young and PWC and they said the benefits were understated.

    You need to understand there are millions of dollars being wasted in companies and people have no clue it is happening. When someone tells them to take out cost they cut headcount because they do not understand the options.

    Just my opinion

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    #192331

    MBBinWI
    Participant

    @rwthr170 – I agree that it is a concern that too often organizations equate “cost reduction” with “workforce reduction.” This is a management team that has too little creativity to find more productive work for the workforce – to grow the company.
    If a LSS implementation turns into a workforce reduction, it will fail utterly. Not only that, but it will forever turn the workers into non-improvement zealots. Why would somebody intentionally work towards their own demise?

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    #192400

    Rwthr170
    Guest

    Thank you very much for your replies. They have been very helpful.

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    #192421

    cfb
    Guest

    Mike,

    Could you elaborate a little on the business case and how it was made? Thanks!

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    #192423

    MBBinWI
    Participant

    @CFB – not to speak for Mike, but here are some of the justifications that I have used –
    o Many organizations have overtime costs due to inability to achieve throughput and/or quality. By implementing LSS overtime can be reduced/eliminated (reduce bottom line costs).
    o Many organizations have additional potential business with their existing products that they cannot service due to capacity constraints. LSS can improve capacity without adding additional resources (grow top line).
    o Many organizations have investment in capital equipment. LSS can free up this valuable resource to be used for new products (grow top line).
    o Employee morale in organizations with high levels of defects and low productivity is often very poor (who likes to work in an environment where what you make is always poorly done, always needs to be fixed, and is always high stress?). LSS can reduce/eliminate the problems, make running the process a less stressful experience, and point directly to the controllable factors so that they can be monitored so that the process stays in control (bottom line costs).
    just to name a few.

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