Prioritizing Improvement Projects: Benefit & Effort (B&E) Analysis

Abstract

Recent research indicates that many improvement (lean or Six Sigma) programs fail to yield desired results in companies. One reason these programs fail is because the improvement opportunities or projects are not correctly prioritized. The purpose of this study is to show how to design and implement benefit and effort (B&E) analysis to prioritize improvement projects in production operations. Considering the company's strategic and tactical objectives, factors for benefit and effort were identified. Benefit was calculated with a weighted average of six factors—quality, service, productivity, safety, saving, and environment. Effort was determined with a weighted average of four factors—personnel, duration, investment, and risk. Both B&E were divided into low and high levels, generating four quadrants. All improvement projects were categorized into one of the four quadrants, and a different implementation priority was adopted for each quadrant. Important for practitioners and academicians, the author discusses many implications of implementation of B&E analysis for prioritizing improvement projects.

BIOGRAPHY

• improvement priority
• lean
• Six Sigma

Additional information

Notes on contributors

Satya S. Chakravorty

Satya S. Chakravorty is Caraustar professor of operations management and professor at Michael J. Coles School of Business at Kennesaw State University, Kennesaw, GA. He received his doctorate in production and operations management from the University of Georgia. He holds bachelor's and master's degrees in engineering and sciences from BITS, Pilani (India). He is a certified fellow of production and inventory management, JONAH in theory of constraints, lean manufacturing (sensei), and Six Sigma Black Belt trained.

His expertise is in designing, training, and implementing large-scale process improvement (lean, Six Sigma, and theory of constraints) programs for Fortune 500 organizations such as U.S. Marine Corps Air Station, Shaw Industries, FMC Technologies, 3M Corporation, Heinz, AT&T, Beech-Nut, Harlequin, and Los Angeles Times. Many of his implementation insights can be found in elite journals or magazines such as the MIT Sloan Management Review, The Wall Street Journal, Quality Progress, and Industrial Engineer. Chakravorty can be reached at [email protected].