By Jordan Horn
Lean is a major buzz topic in the manufacturing industry. The topics discussed can and should be translated into any business model. Lean is simply the philosophy of minimizing waste without sacrificing and improving quality.
There are eight types of waste;
1. Defects/Corrections – Any defect, correction, error, rework, or repair
2. Overproduction – Making or creating too many items that are unneeded at the time
3. Over Processing – Any step, action, or process which does not add value to your company or customers
4. Movement – Moving materials or resources between processes that do not add value
5. Motion Waste – Unnecessary movement of people that does not add value
6. Waiting – Idle or under-utilized time employees have when awaiting resources, information, people, or equipment
7. Non-Utilized Talents – utilizing employees’ skills, talents, and knowledge.
8. Excess Inventory – Any materials, supplies, parts, or products in excess of daily or weekly needs
As you review the eight categories of waste you should be able to recognize one area that your business could identify opportunity. The first waste appears to only directly relate to manufacturing a product when considering repair exclusively. Though if you broaden the definition and consider all employees complete tasks and can be categorized as free of error or not. How can you reduce rework and error in daily, weekly, or monthly tasks? Generally, three techniques can reduce error and rework while improving consistency and quality of tasks: 1) establish well developed policies, guidelines, and procedures; 2) utilize technology to improve process; 3) proper training; and feedback.
Establishing policies, guidelines, and procedures to reduce mistakes and develop standards ensure each employee is consistently completing error free work. While developing or updating policies or procedures you should involve several levels of employees to ensure they can be followed and promote best practices through creative cooperation.
Overproduction and Over processing can occur in manufacturing while it does occur in other business models as well. Has your office staff ever made extra copies, send reports without feedback, or provided unnecessary information from research that was not used in decision making? Do you have multiple steps where individuals manual input data? If so than you have an area that can quickly be trimmed to reduce overproduction, improve time management, and better utilize resources. The first step is identifying tasks that are value adding and those that are not.
Movement and Motion waste look at the time and space to complete your work tasks. Are you utilizing your physical space to the best of your ability to be effective and efficient? Movement can include walking, reaching, bending, or stretching. Is the motion or movement necessary to improve value to your product? Most offices have a single copier room and a hub for a variety of office suppliers. Is this model resourceful if an individual makes a single copy at a time and walks from point A to point B multiple times a day. How your space is organized and maintained is also a large concern to completing tasks. Saving time provides more time to complete essential work functions that add value.
Waiting is another form of waste. This could be as simple as waiting for information to become available to complete reports or waiting for the circle of death to go away while waiting for a webpage to load. If you work in an industry that bills by the hour why wouldn’t you want to reduce waiting to increase billable hours? Depending on what resource your employees are waiting on you can generally start with an incident and map it back to the root cause by asking why 5 times. The exercise of continuing to ask why will force you to be creative and go beyond scratching the surface.
Non-Utilized talents in your workforce can be a waste that causes employee turnover and low morale. Everyone has unique skills and having strong management that can utilize the skills of their team will boost self-esteem. Also keep in mind proper and consistent training is vital to reduce rework, reduce error, and improve quality consistently. In the simplest terms if you train your employees effectively the first time you can save time in retraining and correcting work product while improving your business’ reputation for the better. If you are an established company you can always retrain, generate a quality control procedure, create consistency, and involve key employees to improve buy-in through creative problem solving to reduce waste.
Excess inventory can take up workspace, tie up cash flows, it can also become obsolete over time. Proper labeling and inventory management is key. Your business might not run on a just in time basis although, you can always set reasonable levels. If you have ever cleaned a closet or old drawer you always find items at the back that might once have been important and today are not. It is a similar concept. If you sort, set in order, keep clean, standardize, then you will have consistent results.
Finally, when addressing waste in your business or workspace remember quality is vital. If you reduce a step and the value to the customer is lost than it is not trimming the waste. Provide an open line of communication and get feedback from different departments and customers to get creative solutions and understand your value mapping stream in your business model. If you only provide feedback to employees and never contemplate current procedures and work processes, you could be missing vital improvements to address your company’s ever evolving and changing environment.
I hope this introduction to lean has sparked your interest and you’ll gain a new perspective to reducing waste in your operations. And as you can see lean is not just for the manufacturing industry! If you are interested in a training, business consultation, Excel Report Development or Automation, or assistance with process mapping Horn Accounting and Business Solutions can assist. To find out more go to www.hornabs.com.
Jordan Horn is an accomplished accountant and financial expert with experience in multiple industries. She holds an MBA in Finance from Keller Graduate School of Mangement and a Bachelor’s Degree in Business Administration in Accounting from DeVry University. She enjoys helping others succeed by providing clear and accurate financial information to key stakeholders and by offereing innovative solutions to problems. Jordan is adventurous and enjoys outdoor activities, such as motor sports, camping and exploring. Jordan lives with her husband Dustin, and their two boys, near beautiful Astoria, Oregon.
Follow along on her adventures at www.discoverpines.com and on Instagram @discoverpines