Cost-benefit and implementation selection

Learning objectives

• Explain the purpose of cost-benefit and implementation selection in a garment-factory improvement project.
• Apply the described method to a representative shop-floor situation.
• Recognize the common mistakes and how to avoid them.

Concept

Final selection considers verified benefits, one-time and recurring costs, risk, capacity, timing, and uncertainty.

Include equipment, integration, training, maintenance, downtime, consumables, quality savings, labor redeployment, avoided loss, cash timing, payback, and sensitivity.

Released minutes are not cash unless redeployed to output or reduced overtime/headcount.

Garment-factory example

Compare a folder attachment, workstation redesign, and automated unit using annual defect/rework savings and style-change constraints.

Method

1. Validate quantities with finance.
2. Avoid double counting.
3. Calculate net annual benefit and payback.
4. Model base/best/worst cases.
5. Record nonfinancial CTQs.

Common mistakes

• Treating released minutes as booked savings without redeployment.
• Ignoring maintenance and ramp-up loss.