Week Eight: The Disconnect and Opportunity Analysis
The objective for the design session on Day Two is to educate the team about the process of quantifying opportunity, to identify the appropriate documentation tool, to demonstrate how to create a test scenario, and to clarify the homework for next week, that is, completing the opportunity analysis.
The quantification process follows five principles.
Principle One. At a minimum, the subteams must determine the value of killing the fish using locations and measures from the material flow performance speadsheet.
Principle Two. Factor out the effect of forecasted growth by assuming constant revenue for the financial period; usually saving are annualized. It’s acceptable to includete profit improvement of revenue growth as a result of solving the problem.