In any business we should strive to reduce operational expense AND reduce inventories AND increase throughput simultaneously. Lean management is a technique by which we can achieve this goal as at its core is the identification and removal of waste within the business. There are seven typical types of waste that are found and in this article we explore:
Doing More Than Needed
This is a very common waste that is prevalent in most businesses that I assess. Let me explain a few examples.
When is a Job Finished?
Let’s assume we run a business that builds websites for their clients. We have a meeting at the beginning of the relationship where we obtain the brief of what the client requires in the way of a website. We agree a price for the work and then we get started. Now, when exactly can we say the job is finished? With something such as a website there is always something you can change to make it better. Three people can look at it and have an opinion as to whether the layout should be changed slightly, whether the font should be slightly bigger, changes to the colours etc. This is subjective and can consume a lot of time so be careful to deliver to the customers’ expectations but not go too far in using up our valuable time.
Over Order to Cover all Eventualities
This is a waste that appears again in all areas of the business. If we look at say the marketing department, and assume they have a marketing strategy running where they are going to send out flyers to advertise an event. Now at the beginning they don’t know exactly how many flyers they are going to need so they estimate and add on a few for safety so they don’t run out. They run the campaign and use the flyers they need but invariably there are some left over that weren’t needed, very rarely do we have just the right amount. Now I can understand why we do this, as running out is far worse than having a few too many, however if we go and look through our store cupboards they are often full of old flyers, components, materials, products that have become obsolete and need to be chucked on the nearest skip. All of this has to be paid for in terms of the effort to produce in the first place, the storage costs, the time moving stock and searching in the store for the one thing you do need, and then finally the time and costs in clearing out and scrapping the stuff in the end. By getting the amounts right in the first place we could make huge savings down the road.
Extras to Cover Scrap
Similarly to the example above, let’s say our process doesn’t always deliver 100% every time, we tend to make a few more just in case. The work we must do in terms of waste reduction here is to concentrate on getting our errors to a minimum. We must look at the root cause as to why there are rejects in our production so that we can make one for one each time.
Keeping the Team Busy
How often have we got to a situation where the customer demand has quietened a little and so we have a little extra time on our hands? Now often we love these times because it gives us time to get ahead of the demand. We utilise our team to make stock of all sorts and fill up all the buffers ready for when the big push comes again. This is a natural instinct but can often lead to similar problems as described above. Bulging stores with stock everywhere, no room to swing a cat, and then the big push comes; the customers’ orders come flooding in, the problem generally is that it’s not for the stuff you’ve made but for something completely different. Now with no room to work in, this process becomes very difficult. We should spend more time on getting ourselves geared up to react quickly in these circumstances so we can operate without the huge stock piles.
There is a great temptation when business becomes a little quiet to look at our existing clients and ‘over service’. The main reason for this is that we either don’t know how to do marketing or don’t like doing the marketing to get new customers. At this point our minds own preservation mechanism kicks in and we become guilty of ‘productive avoidance’. To put this in perspective, it’s amazing how busy I can become (convince myself of) when I’m avoiding doing something I know I should be doing and don’t like doing. To make myself busy I generally will look at my existing clients and find extra things that I can do for them. Now I’m an advocate of looking after my customers, however, we need to draw the line somewhere and be aware of this waste of ‘over servicing’. Now as usual, I think if we all look at our own businesses and the people that we employ, there is evidence of this all around. A good ‘Lean’ thinker will become aware of this and be ready to stamp it out.
This is just a few examples again that are visible in many organisations; there are many more. Please be vigilant, take the principles and apply them to your environment to discover the waste going on in your organisation.