Is it even possible to measure 5s success or ROI?
The battle has been raging for some time now about how one can, or cannot, actually measure success as it applies to 5S practices. Some proponents go as far as to state that because you cannot show how much money has been saved through the implementation of 5S in your facility or organization, that an ROI is nearly impossible to establish.
Yet, on the other hand, there are those that state that the ROI in 5S is not based necessarily in monetary values, but rather in “change” (for the better) reflected in improvements either physically to the facility or in the work environment and efficiencies that are realized by introducing 5S Principles into the workplace or manufacturing facility.
Many people believe that it is impossible to calculate ROI for a 5S program. This is troubling to those champions who not only have to come up with a plan, but also generate funding to sustain a 5S initiative.*
MarketLabInc.com, by Thomas Howing 27. December 2012
One of the more “professional” paths of validated measurement, in my mind is that of determining whether the desired goal and action had any effect on the situation or issue at hand. This is the same criteria, whether you are implementing 5S, Lean or any other variation of lean manufacturing philosophies or CI tool. For example, in the PDCA cycle, you would of course apply the “C”, or “Check” control to see if your corrective steps had the desired effect. You may also have used visual controls or even numerical controls of measurement.
We ask again the question… “Did your actions allow you to see any measurable change or movement in a positive direction”?
If so, then you definitively had, or saw, a measurable success and thus the ROI, to whatever degree, was proven. If you saw no measurable improvements then you would simply apply the “A”, as found in PDCA and either “act upon” or “adjust” the your actions before moving forward, while measuring the results of these new actions or adjustments once again to ascertain any ROI.
Returning again to the, we believe, false assumption that measuring ROI is always or necessarily must be tied to the monetary value of any changes that take place or goals that are set, we look at factors such as safety. In almost all cases the safety of your workers or employees should be set above a purely monetary based ROI. This is elementary logic, of course, since too many deaths or accidents in a facility would bring a swift and sure closure of that facility.
And so, to clarify further, the realistic ROI of 5S is more often than not tied to a real-world improvement curve to the facility itself, the products that are produced there, or the services provided, as well as an upgrading of the tools and manufacturing processes, or an increasing of efficiencies and environmental elements that bring about an overall improvement for both the workers as well as the output of the facility.
Tom Southworth from his blog entry “Measuring 5S Success”:
[quote]Get the facts. Why is it leaking? Where is it leaking?
What is causing the leak? How much is leaking? When does the leak occur?
Grasp the situation. This doesn’t mean clean up the leak! This means grasp what is going on and what it means in terms of safety, quality and equipment reliability. Is a motor overheating? Do you have trouble with registration? Is the press running at a slower speed and, therefore, lower productivity?
Then, FIX THE LEAK! Stop it from occurring. Don’t just clean it up and make it look nice. Remember what we said, clean doesn’t equal functional. “Aisle” clean or “aisle” Lean doesn’t mean everything is in proper running condition.**[/quote]
In short, I believe 5S CAN be measured – and in such a fashion that even the bean counters in the upper echelons of your organization will be satisfied. Especially when seen in the light of the possibly devastating cost of NOT paying attention to implementing 5S methodologies and principles into the corporate and/or manufacturing structure of your business. In other words, if you are constantly losing market share due to inefficiencies, than at some point the doors may have to close. I call that devastating.
The terms found in 5S, Sort, Set In Order, Shine, Standardize and Sustain are some of the most powerful words that an organization or business might possibly implement when it comes to being able to influence the bottom line. So I would encourage every business to strongly consider “measuring” their ROI in light of a 5S infusion, company wide. Your customers will appreciate it as well, since once of the outcomes of implementing 5S strategies is that of improved customer support and a higher quality in the product or service provided by the company, at all levels.
If you are looking for help in discovering and following the path of 5S, you can find informative guides and training here: http://www.5stoday.com/
- How To Obtain Relevant Training On The Implementation Of A 5s Process
- How To Make The 5s Principles Work For You In Lean Management
- Jump Start your 5S Program
- 5S: More Than Meets The Eye
- Top Ten Suggestions for 5S Success
- Main Goals To Look Out For When Implementing 5s Principles
- How to Implement 5S in an Organization– creativesafetysupply.com
- How to Measure Your Near Misses– blog.creativesafetysupply.com
- How Kaizen is Imperative to LEAN Success– kaizen-news.com
- How to Organize Your Shop: Try 5S– blog.5stoday.com
- Top 5 Tips for 5S Success– lean-news.com
- Floor Tape + 5S = Success– floor-tape.com