Cost Analysis 💰

This lesson equips innovators with the tools to analyze the costs associated with a problem, helping them measure its impact in terms of wasted money, time, and resources.

Overview:

Imagine your organization spends hours manually updating customer records, and you think automation could help. Your manager asks, “How much is this really costing us?” Time for a cost analysis! You discover that employees spend an average of 15 hours a week on this task, costing thousands in lost productivity. Plus, errors from manual updates lead to wasted resources fixing issues later.

By analyzing the wasted time, money, and resources, you present a compelling case: automation would save $50,000 annually and free up employees for higher-value tasks. With these insights, you confidently show the true cost of the problem—and the value of solving it. ⏱️💡

Key Concepts Covered:

• Identifying Cost Factors: Learning how to identify direct and indirect costs tied to the problem, including financial, time, and resource inefficiencies.
• Quantifying Wastes: Techniques to calculate the impact of wasted resources and time, enabling a clear understanding of the problem’s scale.
• Measuring Organizational Impact: Evaluating how the problem affects broader goals, productivity, or customer satisfaction.
• Data-Driven Problem Validation: Using cost analysis to validate the urgency of solving the problem and guide decision-making.
• Building a Strong Case for Solutions: Presenting the cost of inaction to stakeholders, emphasizing why addressing the problem is a priority.

Want to learn more?:

Check out these resources!

• "Cost Reduction, Waste, and Purpose" by Lean Enterprise Institute - This article delves into the Lean philosophy’s approach to identifying and eliminating waste. It highlights how to recognize inefficiencies across systems and processes, ensuring that efforts to reduce waste align with broader organizational goals and purposes

About the instructor: 

Jeff “Smoker” Adling enlisted in the Air Force in 2002 from Dallas, Texas, and later earned a commission through Officer Training School. Over the course of his diverse career, he held key roles as a communications technician, logistics officer, inspector general, and special operations pilot with over 2,000 flying hours in remotely piloted and nonstandard aircraft. As a Lean/Six Sigma Black Belt, he channeled his passion for organizational behavior and problem-solving into unlocking the potential of diverse teams, addressing even the most challenging issues. He is also an experienced innovation coach, utilizing the science of storytelling to empower Airmen in advocating for their solutions.

Prior to joining the Productable team, Jeff was the Master Process Officer for Air Force Special Operations Command, spearheading continuous improvement and innovation throughout AFSOC.  He is currently pursuing a Doctorate of Business Administration from The University of Florida and spends his free time perfecting his photography.