As companies become more agile and the expectations of customers evolve, many are turning to a continuous improvement model of operation. Adopting a continuous improvement model requires a culture shift as well as an investment in technology designed to support it, so it is no wonder that leaders want to understand the impact and potential ROI that adoption of a continuous improvement model will achieve. You might not be able to see into the future, but we invite you to consider the past. In order to understand and quantify what happens when companies embrace improvement, we conducted a study of customers using KaiNexus improvement platform. We looked at over 3,400 completed improvements and uncovered some stunning results. These customer experiences might help shed light on what would happen if your company embraced a continuous improvement model.
Reducing costs is a common reason that companies adopt an improvement culture and platform. Employees who are closest to the spending often have creative and effective ideas for reducing cost while maintaining quality and customer satisfaction. Every company engages in some wasteful spending, so it is worth the effort to identify and eliminate it. In fact, KaiNexus customers were able to save an average of $30,728 for every identified opportunity for improvement involving cost reduction.
Revenue generation is the “Yin” to cost reduction’s “Yang.” Together they form the bottom line. Ideas for revenue generation do not only come from the sales or product teams. Anyone in an organization can have an idea about how to attract new customers or sell more to existing ones. KaiNexus customers found this to be true as they were able to average $92,182 in new revenue for every revenue related opportunity for improvement.
The continuous improvement model helps companies identify ways that they can save time in terms of more efficient process, quicker delivery on products, and faster customer care. Time is money, of course, so saving time can have a direct financial impact. Customers in the study saved an average of 244 hours per time related opportunity, dropping $7,919 for each down to the bottom line.
As we said earlier, in order for a continuous improvement model to be successful, a continuous improvement culture is necessary. That is achieved when employees are actively engaged in improving the company. KaiNexus customers average one opportunity for improvement per employee per year. Examining those with a financial impact reveals an average $6,201 per employee, per year.
This is just a snap shot of the ROI the study participants have achieved with the continuous improvement model. You can read more detail about it here. The bottom line is that adopting the continuous improvement model, along with a platform designed to support it, may have a material impact on both the revenue and expense side of the ledger.