50% Cost Reduction

A client organization recently summarized their experience below.

Our challenge was to come up with a 50% reduction in costs due to annual overrides with our billing system.

Our Performance Consultant facilitated a three day Kaizen Event, with  an eight person cross functional team. Kaizen comes from the Japanese words “Kai” which means change and “Zen” which means good. The Kaizen philosophy is to “do it better, make it better, improve it even if it isn’t broken, because if we don’t we can’t compete with those who do.”

The team implemented immediate changes in our process that resulted in a positive impact to the bottom line of over $375,000 annually due to less billing errors. Additionally over 30 man-hours per day of non-value added re-work were eliminated. No one was laid off as a result of this change.

Benefits resulting from the change will have an immediate impact as solutions required very limited IT work. Extensive training and communication were completed during the 3 day event. The benefits include:

  • Decreased number of manual price overrides
  • Increased price integrity and accuracy of customer invoices
  • Improved productivity for various departments (Pricing, Sales, MAR, AR, etc…) as well as the distributor and supplier
  • Increased customer satisfaction
  • Increased sales potential as our customer service reps will have less admin and more phone time with our customers

We couldn’t be happier with the results below:

Kaizen Result

Current Process

New Process

Improvement

Process Time 157 minutes 30 minutes 81%
Lead Time 6143 minutes 1613 minutes 74%
Accuracy 35% 72% 106%
# Process Steps 15 9 40%