As raw material prices increase and energy costs become more volatile, getting the most out of your process is critical. Rising costs can rarely be passed wholly down the value chain. In continuous process industries, where quality and yield are inseparable, reducing costs begins with better yield.
Improvement teams in a LeanSigma company focus on total yield, as well as conserving raw materials and energy to keep their organizations insulated against price fluctuations. Creating a culture that is always looking for ways to improve yield means that creating greater savings will become reflexive. When commodities are scarce or expensive, you will be well positioned to thrive.
Consider a bakery, for instance, with dozens of plants in three countries that just saw a year in which oil prices doubled and the price of wheat spiked 50 percent in six months. Another company might have considered cutbacks or layoffs. But just before wheat shot up in price, the company rolled out LeanSigma in several plants. In just one site, with $75 million in annual sales, there were four kaizen events in the first eight months. These four teams focused on saving raw ingredients, better productivity without job loss, energy savings without capital investment, and gains in capacity. Total annual savings as a result of these four events: $1,920,000.
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