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Cumulative Financial Benefit

The chart, adapted from a study of successful execution of lean programs by ARC Advisory Group Inc., of Dedham, Mass., and provided by Citect, shows the cumulative financial benefit from lean initiatives.

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The flow and timeline of activities, from training to Kanban, are those of typical lean undertakings. It takes time to generate enough financial benefits to exceed costs, but time is the enemy of many programs, and pulling the plug too soon is a problem among those with short-term vision. Costs include investments in training, work with outside consultants, the setting of basic infrastructure, value stream mapping, and the ensuring of rapid set-up, well-planned cellular manufacturing, and Kanban the manufacturing order system that uses pull from customer demand to help drive maximum throughput.

See the main story that goes with this sidebar: Lean Metamorphosis.

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