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:
Right First Time
Another of the deadly wastes in business is not getting things right first time and this applies equally to all areas of the business. Let’s look at some examples and the effects they may have.
This can be a worrying time for even the best judge of character and ability. We invest a huge amount of time and cost into this process in terms of interviewing hours, advertising, recruitment agencies costs. And that’s just to employ someone! Then when they start there is the induction time / costs.
Often I hear Business Owners say that the employee isn’t really useful to them for a number of weeks until they are trained and get to know our systems. Imagine the shock and horror 3 months in when we finally decide the new recruit isn’t up to scratch! Do we scrap and start again?, Just accept it because we can’t bare having to go through all that again? Cover things they can’t do themselves with someone else? All of this puts a huge strain on the business and the Owner and if measured in terms of cost in hours and money would probably add up to a tidy sum. OK, I understand it’s not that easy. However, we should put systems in place which ensure we have a better chance of getting things right first time.
Misunderstanding of requirements
A client recently relayed a story to me of how they were commissioned to undertake a particular piece of work. Many weeks of effort were invested behind the scenes preparing everything for the big delivery day. Imagine the worry for the two parties on the actual day when the solution didn’t meet the expectation of the client. So where was the problem? There had been a miscommunication at the very start and the project brief had been recorded incorrectly! This happens time and time again in all areas of the business where people are working on the wrong things because there has been a misunderstanding of what is actually required.
I once was asked to take over the lead of a project that had been running for two years and going nowhere fast. My first action was to ask the four team members to bring me up to speed with where they were and what had happened over the previous two years.
After about an hour of sitting to them describing what had happened I have to say I was totally confused as to where they were. I then asked them to go to the four corners of the room and write on a piece of paper what they thought the objective of the project was in less than 20 words. About 10 minutes later I got each of them to read out their statement. At this stage there was a lot of disagreement as they each had written something different down; they were not aligned and were actually each trying to achieve something different, not by much but enough to ensure they made no progress.
Just this simple exercise got them to understand their differences and a quick alignment process ensured they all understood clearly the project brief. The project was completed 6 weeks later!
Lack of system robustness
It’s a fact that all humans are prone to making mistakes. The more human involvement in a process the more chance there is for it to go wrong. I recently visited a business where orders were still received in a manual system. Now, there is nothing inherently wrong with this if it fits with the business requirement. However, in this business the client needed to duplicate the key information into 4 other separate manual systems and this as expected was done by hand by humans. Needless to say there were many occasions when a telephone number had been put down incorrectly, or the address and post code were slightly out. Imagine the cost to the business when product was sent to the wrong place etc. A rule of thumb here is to systemise the routine operations and humanise the exceptions.
Many business actually make product to sell. Now suppose we have an order for 10 of a certain item and set our manufacturing system up to make them. The product go right through all of the processes and get to the end ready for dispatch. It’s at this point that many businesses will send in the inspector to check that the items all meet the required standard.
What happens if say a couple of the parts are not right! Do we send them back through the system for rework? Start a couple more from scratch? Have to wait to send all 10 parts at the same time so the customer has to wait and experience delays? Or send the 8 good ones and then pay for extra shipping for the last 2 when they’re done? All of these scenarios generally can incur costs, time delays and reputation issues for a business.
Now there hundreds of similar examples that we could discuss here, and I’m sure you could add a few more of your own. The secret is to understand the root cause of the problem and solve it so that it never occurs again. So how do you ensure that mistakes are not repeated in your organisation a second time?