Prioritizing Improvement Projects: Benefit & Effort (B&E) Analysis
Management and Entrepreneurship
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.