We recently spoke with Ken McGuire about the lean ROI topic. Ken leads an independent consulting firm and is a long-time authority on leading manufacturing practices. A founding member of the Association for Manufacturing Excellence (AME), most recently he designed and manages the AME Institute’s leadership development initiative.

ROI is a really confusing term. It’s not transparent what it means. Financial returns are not always obvious in operational activities. But shorter lead times are obvious. Better quality is obvious. But is that a financial return? There are clear financial returns only when the improved velocity is leveraged to benefit the whole business.

Investment is the other question with ROI. Is that the cost you pay for something? Or is it the cost of time when you could have been doing something else? How do you know which is which?

To simplify things, the manufacturing cycle begins with the buying decision and ends with delivery and cash collection. …. Continue reading Ken McGuire – Lean Returns Really Take Off When Velocity Improves