The Law of Diminishing Returns

The Law of Diminishing Returns

Companies that successfully launch Continuous Improvement Programs often find that in the 2^nd or 3^rd year of the Program it is increasing more difficult to identify what they consider decent or worthwhile projects after all the big meaty projects have been delivered on,  i.e. the law of diminishing returns. So what can be done in this scenario?

1. Venture further upstream in your Value Stream Map and start focusing on your Design Processes using the Design for Six Sigma Methodology (DFSS) to improve metrics like Time to Market for New Products, Right First Time (RFT) for Qualification or Prototype Parts, Actual Yield Rate versus Planned Yield Rate, etc. Note that Design Processes can mean both Product and Process Design.
2. Drive the improvement effort wider and deeper i.e. get more of the foot soldiers involved in small improvement efforts. This could mean a Kaizen event for the payroll staff, goods in team or maintenance technicians or running a simple 2 day Yellow Belt Course with team based projects focusing on what are typically referred to as Support Processes or Functions.
3. And lastly don’t take you eye of the ball in neglecting your current ‘core’ processes even if they have been subject to ‘big Projects’ in the past. Lest you need reminding, Customers are continually raising the bar in terms of their requirements, your competition is snapping at your heels, technology is evolving at an ever increasing pace and regulatory requirements are getting more and more challenging. All of these pressures may lead to the identification of future Projects albeit the business case savings might not be as rewarding as there were in the early days.

Submitted by Éamon Ó Béarra