Lean Enterprise
Potential Cost Savings Through Lean Enterprise Techniques
Despite years of increasing efficiency in all sectors of the economy, there still remains much room for improvement in many organizations. In most production organizations, only 5% of activities add value, 35% are necessary non-value adding activities and 60% add no value at all. This represents an enormous opportunity for improvement. Below are examples of the potential to reduce costs through Lean Enterprise facilitation and performance management in general.
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Opportunities to Reduce Costs and Increase Cash Flow* |
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Item |
Reduction/Increase |
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Facilities Development and Management |
5 - 31% reduction |
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Insurance and Risk Financing Costs |
15 - 40% reduction |
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Human Resources |
5 - 50% reduction |
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Information Systems |
8 - 20% reduction |
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Administration |
10 - 30% reduction |
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Professional and Consulting Fees |
5 - 50% reduction |
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Maintenance, Repair and Overhaul |
10 - 29% reduction |
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Cost of Goods Sold |
5 - 20% reduction |
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Cycle Time |
50 - 70% reduction |
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Capacity |
50 - 100% increase |
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Cash Flow |
100 - 120% increase |
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* Based on average cost savings potential for performance managed companies. |
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