Kaizen - your secret weapon in a down economy

We all hear it everyday. Bailouts, layoffs, closings, and the endless parade of bad news. It seems everyone is in cost cutting mode. Using Kaizen or Lean techniques, you can start your journey to improve and find the money wasters that eat away at your income and gnaw at your wallet. Here's a story of how I save a bundle on a furnace using Kaizen. Just using one simple question, "How can I do this better?" led to the result below.

My home furnace was 23 years old and needed to be replaced. I received an estimate from the outfit that inspected and cleaned it of $3100 to replace it.

First Kaizen improvement - gets estimates from different companies for competitive bidding.

I called several places for bid and only two called back. On top of that, only one bidder showed up. He gave me a bid of $3195 for the same furnace. I guess all those other places had so much business that they didn't need my money. My hunch is that they didn't have an efficient process for retrieving messages from voice mail. Another example of where muda, or waste, can stop new business.

Second Kaizen improvement - deduct cost of furnace cleaning from the bid.

Now I had reduced the cost to $3025 with an email. My next Kaizen was to negotiate the bid down and see how much I could reduce it by removing the old furnace myself. What happened then was unexpected but led me down a new path. My father called me and needed help replacing his furnace and I spent a couple days helping him which led to my next kaizen.

Third Kaizen improvement - use this project to educate myself and evaluate the difficulty of replacing a furnace.

After helping my dad, it didn't seem so bad to replace my own gas furnace. Now I can tell you that if you go out and look at various internet forums that everyone will tell you not to replace your own furnace because you will blow your house up. This is classic FUD - Fear, Uncertainly, and Doubt. I called my city government and they insisted that a homeowner can't do it. However, a contractor friend of mine said that a homeowner can do this and then he came over and gave me guidance. Just a note, some contractors want you to be afraid so you will hire them.

Fourth Kaizen improvement - replace my own furnace

My same contractor friend had some older furnaces that he bought from a merger with another company. He had a scratch and dent model with a full 5 year warranty for $385.00 so I bought it. In yet another bit of good fortune, my brother had recently worked on his gas furnace and offered to help my replace my old one. Now I had a new furnace and labor...we did the work in a weekend and I am so grateful for his help since he knew how to handle natural gas.

LEGAL DISCLAIMER: I am not advocating replacing your furnace if you don't know what you are doing-proceed at your own risk!

The total cost of my furnace replacement started at $3100 and with Kaizen and constantly finding ways to improve, I replaced it for about $425. Total saved on the project was $2675.

If you use Kaizen correctly, you can find improvements that can really save you money during hard times. Use it as a secret weapon!

Dan Lafever, Kaizeneer