This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here: http://flevy.com/browse/business-document/robust-production-management-rpm-module-9-measuring-before-and-after-savings-467 So you've completed a process or performance improvement project at work, and now management wants to gauge the financial benefit of the project's "after" state. This was once the challenging, and often daunting, phase of a project - but no more! There are a variety of ways to demonstrate hard-dollar benefits of almost any project, and Robust Production Management (RPM) Module 9: "Measuring 'Before and After' Savings' will show you how. Module 9 is full of examples and templates featuring definite ways to show how your project has "moved the needle" for the organization in a positive direction. "Measuring 'Before and After' Savings" is the ninth module in the Metrilogics RPM management training series - more on the way.

1. Copyright © 2005 Metrilogics, LLC. All rights reserved.
Robust Production Management
Metrilogics
Front-line controls for bottom-line savings.
TM
SM
Module 9:
Measuring “Before and After” Savings
By Lance Latham
Senior Managing Partner

2. Copyright © 2005 Metrilogics, LLC. All rights reserved.
Metrilogics
TM
Importance of Quantifying “Before” and “After” States
v Generate initial support for the project among internal sponsors and
stakeholders thru a strong cost/benefit analysis business case.
v Solidify participation and increase focused engagement among
project participants, operations managers and front-line SME’s.
v Facilitate evaluation of the project’s progress to objectively answer
the question, “Is the project on track to deliver the promised bottom-
line results?”
For any operational performance improvement initiative, it’s necessary
to first quantify the issues and costs surrounding the current state, and
the benefits to be achieved in the post-project state. The ability to put
numbers to the “before” and “after” operating states will:
v Provide a solid foundation for determining cash bonus payouts to
project participants at the project’s successful conclusion.
2
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3. Copyright © 2005 Metrilogics, LLC. All rights reserved.
Metrilogics
TM
Example of Time Studies
Before After
The “Before” scenario depicts relatively lower task rates and longer task
durations than in the “After” scenario, because the “Before” scenario includes
both required quality process steps + controllable waste. In the “After”
scenario – when the controllable waste is removed – hourly output volume
increases by 32%, while corresponding process durations decrease by 24%.
5
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4. Copyright © 2005 Metrilogics, LLC. All rights reserved.
Metrilogics
TM
Example of Performance Distributions (Productivity)
Before After
Note that in the post-improvement “After” scenario, the consolidated team
(down 33% from 73 team members to 49) is much more productive, with an
average Productivity rate of 74.18% (significantly better than the “Before”
scenario’s average team Productivity of 49.25%).
8
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467

5. Copyright © 2005 Metrilogics, LLC. All rights reserved.
Metrilogics
TM
Module 9 Summary
v To ensure early buy-in, commitment and follow-through on any
performance improvement initiative, it’s important to first quantify
“Before” operating issues and costs, and track “After” progress and
bottom-line benefits.
v Each of the tools discussed and depicted in RPM Modules #1 - #8 can
be used individually to quantify “Before” and “After” operating states.
v When used together, RPM tracking tools can be cross-referenced to
reinforce the success of any operational cost savings initiative, and
keep project sponsors, operations managers and team members
engaged in on-going performance improvement.
11
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467

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