What numbers can you expect?
Empirical results gathered for Cost Reduction as a result of Lead Time Reduction
| Project # |
Lead Time
(% Reduction) |
Overal Cost
(% Reduction)
|
||
|---|---|---|---|---|
| 1 | 36.0 | 36.0 | ||
| 2 | 39.0 | 2.0 | ||
| 3 | 54.5 | 18.0 | ||
| 4 | 57.1 | 13.0 | ||
| 5 | 60.0 | 16.9 | ||
| 6 | 79.0 | 49.0 | ||
| 7 | 80.0 | 32.0 | ||
| 8 | 85.6 | 33.0 | ||
| 9 | 86.7 | 16.5 | ||
| 10 | 88.0 | 13.1 | ||
| 11 | 92.9 | 28.0 | ||
| 12 | 93.8 | 40.0 | ||
|
Tubino, Francisco; Suri, Rajan (2000). "What Kind of 'Numbers' can a Company Expect After Implementing Quick Response Manufacturing? Empirical data from several projects on Lead Time Reduction." From Quick Response Manufacturing 2000 Conference Proceedings, R. Suri (Ed.), Society of Manufacturing Engineers Press, Dearborn, MI, 2000, pages 943-972. |
||||
QRM’s impact on the bottom line
| Commodity | MCT (in days) | % MCT Reduction | % On-time Delivery | As-delivered PPM | % Cost Reduction | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Before | After | Before | After | Before | After | |||||||||||
| Blades | 15 | 2 | 87 | 74 | 97 | 4,500 | 300 | 11 | ||||||||
| Knives | 104 | 15 | 86 | 40 | 88 | 12,000 | 1,500 | 22 | ||||||||
| Hydraulic Valves | 141 | 10 | 93 | 40 | 98 | 50,000 | 1,500 | 14 | ||||||||
| Hydraulic Motors | 42 | 18 | 57 | 40 | 97 | 15,000 | 500 | 20 | ||||||||
| Wiring Harnesses | 32 | 2 | 94 | 43 | 99 | 3,000 | 500 | 20 | ||||||||
| Seat Assemblies | 25 | 5 | 80 | 40 | 95 | 50,000 | 500 | 16 | ||||||||
| Machined Parts | 22 | 10 | 56 | 99 | 99 | 300 | 300 | 12 | ||||||||
| Circuit Boards | 25 | 16 | 36 | 99 | 100 | 3,164 | 14 | 17 | ||||||||
|
Ericksen, Paul; Suri, Rajan (2001). “Managing the Extended Enterprise”. Purchasing Today 12 (2).
MCT = Manufacturing Time Cycle PPM = Quality in Part Per Million Defects |
||||||||||||||||
MCT Reduction and Cost
| MCT Reduction | Inventory Savings | Production Cost Savings | Total Gross Savings | |||||
|---|---|---|---|---|---|---|---|---|
| Company 1 | 17% | $69,041 | $18,581 | $87,622 | ||||
| Company 2 | 45% | $45,300 | $2,015 | $47,315 | ||||
| Company 3 | 29% | $218,743 | $70,010 | $288,753 | ||||
| Company 4 | 45% | $2,574 | $3,880 | $6,454 | ||||
| Company 5 | 73% | $69,476 | $27,519 | $96,995 | ||||
| Company 6 | 11% | 6,650 | $7,830 | $14,480 | ||||
| Company 7 | 53% | $188,497 | 389,988 | $578,485 | ||||
| Company 8 | 13% | $646 | $656 | $1302 | ||||
| Company 9 | 22% | $3,022 | $3,127 | $6,149 | ||||
| Company 10 | 82% | $171,696 | $(3,485) | $168,211 | ||||
| Company 11 | 54% | $11,194 | $322 | $11,516 | ||||
| Company 12 | 79% | $258,663 | $387,363 | $646,026 | ||||
| Company 13 | 39% | $1,358 | $381 | $1,739 | ||||
|
Hayner, Andy (2011). “Realizing Business Impact Through Time-driven Continuous Improvement, Wisconsin Manufacturing Extension Partnership (WMEP)” From Quick Response Manufacturing 2011 Conference Proceedings, A. Krishnamurthy (Ed.) |
||||||||