Cost Deployment | White Paper

Cost Deployment: A Structured Methodology for Cost Analysis

• Cost Deployment is a structured methodology applicable to manufacturing processes that enables the linking of processing costs to their respective root causes.

• Identifying and subsequently addressing the waste responsible for unnecessary costs enables the definition and prioritization of improvement actions within the pillars of Lean World Class®.

• Implementing the Cost Deployment pillar involves a rigorous 7-step process, each step supported by appropriate analytical tools.

The end result is a process improvement plan that delivers benefits to the company’s income statement in the short term.

What is Cost Deployment

Cost Deployment is a methodology that enables a systematic analysis of production costs aimed at highlighting and quantifying sources of economic loss in manufacturing processes, identifying and measuring the causes that generate them, and classifying them as waste. 

The objective is to prioritize improvement activities within a Lean World Class^® project by directly linking the results achievable through waste reduction initiatives to cost reduction targets and the resulting financial benefits, making these results easily identifiable on the income statement.

Ultimately, Cost Deployment provides an analytical and in-depth view of costs as a strategic variable because, by establishing a close link between cost drivers and improvement processes in manufacturing, it serves as a cross-cutting pillar—a true compass—for the activities of the other pillars that make up the Lean World Class^®model.