Wednesday, December 3, 2008

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


Jay said...

Great Post. This may come off as a self serving response, but you have hit the nail on the head regarding a need to take action.

I own and operate two websites that are designed to help with the exact problem you were faced with. is a site that helps homeowners who just can't afford to pay the extreme prices that HVAC contractors charge. is an information site that uncovers bad practices by the HVAC industry to try and separate homeowners from their hard earned money.

Your story is very inspirational and I really like your description of the tactic contractors use to discourage homeowners from trying to save money. "FUD" I am going to use that in an article.

I think that the real issue that many contractors overlook, or choose to ignore is that some homeowners are just not able to pay the inflated prices, and therefore must "find a better way".

lafever said...


Thank you for the post! Feel free to use FUD...

I am hip to the fact that there bad HVAC contractors out there. Several years ago, there was a gas smell in my house. I called the gas company and they turned off my gas and said to fix it before they would turn it on. I called DialOne in Indy and got one then two guys out to service my leak-which was on a Sunday morning in the winter.

After 3 hours, the guys had found nothing after squirting every pipe joint with Dawn. So, I talked to them and told them that I don't know about natural gas but that i did understand troubleshooting and to draw me a picture of what they had done. Once I saw the picture, I realized the solution and told them to disconnect everything from the gas except for the water hearter and furnace. Once they did this, the problem was solved in about 20 minutes. Then they had the nerve to hand me a $1000 bill. We finally settled on $350 but in retrospect, I shouldn't have paid them anything.

After they left, my furnace stopped working that evening. I called my buddy over and we found the problem. The was a quarter inch of Dawn soap in the electronic control board. We cleaned it and gently washed the board bottom and dried it out. After that was all dry, it was fine.

I was not impressed by those DialOne techs. They didn't seem to know much of anything when it came to problem solving.