#Best place for lean leader
“Where is the best place in our organisation to place a #continuousimprovementculture programme person?”.
“Our business model is 65m euro #sales, 25% direct labour, 40% #materials, 25% fixed costs giving an #EBITDA of 10%?”. “A 5 x valuation on EBITDA in our sector right now”.
Well lets assume the person has the right #leanleadership
experience and is placed in the right place in the #organisation, so that can operationally and strategically influcence all levels, you could expect within 12 to 16 months (all figures based on the current sales figure) the following:
🥅Your direct labour costs to reduce by 6% to be re-focused on increased sales production capacity and #problemsolving so we would not let these people go.
🥅Material cost by 4% not including a lower level of #materials in warehouse, WIP and finished goods costs.
🥅At the start a reduction of 2% in fixed costs, as we start to approach #tps basics. (I mean really basic TPS to start with).
🥅Giving you a 2% increase in EBITDA and an increase in valuation of 20% leaving you with 6,5 m euro more in your pocket on sale of business.
🤨”Thats not possible, those are amazing results, really!”.
🧘♂️Actually is pretty standard, as a good beginning, really. The figures are based on experience and each business needs to be looked at individually for a proper #assessments of current and future state.
🥇 So, Where would YOU place that person in YOUR #organisationaldevelopment ?