OK, first I want you to watch ten seconds of this video.
Go to the :20 mark and watch to the :30mark. That’s it. (You can watch the rest of it if you want to, of course, but I’m going to talk only about this one scene.)
So…the associate saves about two hours a day wrapping packages. Not bad, right? My question is…is that a “cost savings” or not?
I’ve gotten two basic answers to this sort of question over the years:
1.) No, it’s not a cost savings because, unless I get rid of a position, my labor costs will be the same.
2.) Yes, but it’s a “soft savings”. We may not see “cost savings” from any individual improvement but the improved efficiency from all of them will eventually show up on the bottom line.
Then there’s MY answer…Who the hell cares if it’s a “cost savings” or not?
Did the extra two hours add value that the customer wanted or needed? Of course not. Did the extra two hours improve employee safety and well-being? Of course not. Did getting rid of the extra two hours improve flow of material? I bet it did.
Like I said…who the hell cares if it’s a “cost savings” or not? Lean is not for cost savings. It’s for better manufacturing. Better manufacturing delivers a better product at a lower cost.