ABSTRACT
The real problem with failed Lean and Six Sigma initiatives is really two-fold, namely too many projects and focusing on cost reduction. Many companies simply have too many on-going projects that drain valuable resources needed for the day-to-day issues facing them. Earlier we said that focusing improvement initiatives on cost reduction was one of the reasons that many Lean Six Sigma initiatives are failing. Across-the-board cost cutting initiatives are pretty much standard for many businesses. The chapter demonstrates the impact of trying to maximize the performance metrics, efficiency or utilization, in each step in the process. The key point here is that the only place where maximizing efficiency makes any sense is in the system constraint. The excessive work-in-process build-up encumbers the process and extends the cycle time of the process, which typically results in a deterioration of on-time deliveries.
