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COST OF WASTE / COST OF POOR QUALITY
COW/COPQ
Analysis is not only essential in identifying the financial benefits from your improvement efforts, it tells you the priorities
and where you need to work to get the most return for your investment.
Starting with the basics of Value Stream Mapping,
we take a look at the overall flow of materials and transactional processes for the Value Stream to develop the Current State
VSM. Then we dissect the VSM, identifying the significant "buckets" of COPQ and COW, categorizing them according to Internal
/ External Failure Costs and the Seven Deadly Wastes, and finding the Constraints and Bottlenecks. We identify TAKT and cycle
times, rhythmic capacities, lead times, change over times, first pass yield and rolled throughput rates, levels of WIP and
inventory, and the costs associated with the Hidden Factory (defects, scrap, rework). We apply the knowledge gained to drill
down to the micro-process level to get to the root causes for the COW / COPQ. Applying Project Management Tools and Principles
and ProcessModel simulation software, we then develop an implementation plan for Lean Sigma Projects and the Future State
VSMs that will optimize your VSM and deliver the greatest returns, tied to the overall corporate strategy.
Value Streams
and Financial Systems associated with COW / COPQ Analysis differ greatly from one company / organization to another. Thus
the COW/COPQ Training requires a great deal of customization. Typical training and mentoring engagements last from two to
seven weeks, one week per month, depending upon the size and complexity of the organization and its Value Streams.
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