C an we cost-justify continuous improvement? Can you believe that people ask that question when deciding whether to adopt Quick and Easy Kaizen for their organization? Like not continuously improving is an option! Ralph Keller, President of the Association for Manufacturing Excellence (AME) set out to put the question to rest in his article for Industry Week, What's Continuous Improvement Worth?
QnEK is the antidote to the 8th waste.
Ralph writes about the false savings people identify to justify continuous improvement. For instance, reductions in inventory are misrepresented as dollar-for-dollar savings. Instead, Ralph quotes one of his former bosses, "Revenue growth will cover lots of sins," to indicate the payoff that is available from our continuous improvement efforts. He argues that driving out waste a little bit at a time and continuously will add up to a significantly enhanced competitive position. He cites a 2003 HBR article where mid-sized companies show 15% – 20% year-over-year revenue growth from their continuous improvement efforts.
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