Creating Sustainable Shareholder Value with Lean Six Sigma
Evaluation and Portfolio Selection of Lean Six Sigma Projects
In practice, it is often discussed which effects of Lean Six Sigma projects are relevant for financial success, which in turn is directly linked to the financial measuring system. Due to its new approach of combining the Lean Six Sigma and Shareholder Value concepts with the resulting project evaluation and prioritisation, this book will be of interest for managing directors, controllers and Lean Six Sigma Master Black Belts. Accordingly, the question of how Lean Six Sigma projects can sustainably increase shareholder value is clarified. Providing detailed descriptions of the theoretical background and practical realisation for both concepts, financial and non-financial project evaluation, project risk evaluation and project prioritisation, this book will as well be of use for students, lecturers and project managers.
The demonstration of these concepts includes project starting points such as types of wastage and quality costs, project procedures, Lean Six Sigma organisation, a comparison of discounted cash flow (DCF) and different residual income (EVA, CVA) evaluation versions as well as value based management and levers of value creation. For typical projects, the different effects along the company value chain are described comprehensively and the financial impact on earnings (EBIT), cash flow (CF) and shareholder value (SV) is calculated in detail taking into account the weighted average cost of capital (WACC) as well as sustainability, duration and growth. Furthermore, non-financial impact based on the balanced scorecard (BSC) approach and project risks are evaluated. Considering the portfolio theory and different methods of project portfolio selection, a project prioritisation is conducted. The implementation of these steps allows the selection of the most relevant projects for realisation in order to sustainably increase shareholder value.
Volker G. Hahn is deputy head of the Lean Six Sigma department within the production unit dialysis machines at Fresenius Medical Care. After an apprenticeship as electronics technician he gathered professional experience with different companies in Germany and abroad before graduating in Business Administration and Mechanical Engineering (Dipl.-Wirt.-Ing. (FH)) in 1999. As project manager with Fresenius from 1999 until 2005, he led large-scale projects within the fields of supply chain and logistics, technology transfer and product launch, product costs as well as product quality. Since 2006, he has been working as Lean Six Sigma Black Belt and Master Black Belt. Majoring in financial management, he received a Master’s Degree in Business Administration (MBA) with distinction in 2009.