Lean Enterprise Benefits Analysis

Overwrite the existing numbers and enter your current Dollars, Headcounts, Sq Footage, and Machine Downtime in Column "C" Program will calculate savings in four payback categories: Poor 5%, Fair 10%, Good 15%, Excellent 25%

Use this information to help estimate payback from a Lean implementation.

Lean Enterprise Implementation Results
Category Inventory Annual Savings @ 25% Inventory carrying costs Headcount - MFG Direct Headcount - MFG Indirect Headcount - ADMIN Direct Savings @ $25K per head # # # 50 11 25 $ Current Amount 800000 Poor 5% 40000 Fair 10% 80000 Good 15% 120000 Excellent 25% 200000

10000 2.5 0.55 1.25 107,500

20000 5 1.1 2.5 215,000

30000 7.5 1.65 3.75 322,500

50000 12.5 2.75 6.25 537,500

Space Overheads - MFG Fixed Overheads - MFG Variable Overheads - Administration Total Savings from OHD Reductions Machine/Line Changeovers Machine Downtime

Sq ft $ $ $

18000 300000 175000 180000

900 15000 8750 9000

1800 30000 17500 18000

2700 45000 26250 27000

4500 75000 43750 45000

$ 2000 Hrs 750

32750 100 37.5

65500 200 75

98250 300 112.5

163750 500 187.5

Summary
Total Savings $ $150,250 $300,500 $450,750 $751,250

Space Savings Machine time gained Increased Machine Changeovers

Sq Ft Hrs #

900 37.5 100

1,800 75 200

2,700 112.5 300

4,500 187.5 500

Some Typical Lean Enterprise Benefits
* Improve productivity substantially . * Significantly reduce manufacturing space requirements. * Reduce inventory levels to a few days supply instead of a few months supply. * Improve cash generation through lower inventories and lower capital investment. * Eliminate defects while improving product quality and reliability. * Reduce lead time and improve on-time shipments performance. * Design products that use simplified manufacturing techniques and that have Six-Sigma quality levels designed in. * Have everyone in the organization involved in a continuous improvement activity, permanently. * Reduce your monthly accounting close to a couple of days instead of two weeks. * Run your machines for months or even years without unscheduled downtime. * Reduce your set-up times and produce smaller and more frequent lots. * Have a facility that is a showcase and can be used as an effective marketing tool. The extent of the savings gained will depend on current status and commitment to the Lean program and the % returns used are for estimation purposes only. This spreadsheet is to be used as a guide only for estimation purposes and implies no definitive payback or guarantees of any kind.

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