Lean Cost Reduction

What is Lean Cost Reduction?

It’s an organized procedure for the efficient identification and elimination of unnecessary cost in a product, as created by both the product design and the production process used to make it.

Value Analysis, Cost Structure, Peeling the Cost Onion are all used in this overall procedure.  The idea is to create a leaner, lower-cost value stream for these 3 processes in your business:

1.  Product Design:  Concept to Launch

2. Product Manufacturing:  Order to Ship

3. “Getting Paid”:   Order to Cash

Lean looks at all of the various elements of cost as targets for elimination or at least dramatic reduction.  Lean Thinking considers 50% of your costs to be pure waste, 40-45% to be incidental costs, and only 5-10% to be truly value-added costs.

The direct attack on Cost Reduction results in these “pure waste” and “incidental work” cost elements being eliminated or reduced.  This is done in a workshop conducted either on-site or off-site.

JCM Work Designs/The Lean Sigma Team can design and conduct this workshop to meet your specific needs.  Please contact us for a formal proposal.