TOR 052: How To Eliminate Waste From Your Company As A Recession Looms
Here’s the latest edition of The Optimized Report newsletter, which features 1 actionable tip every Sunday to help burned-out business owners dramatically improve their performance, profit, and potential without sacrificing what's most important—TIME.
Preparing for a recession should be a regular practice.
It's about continually looking at your company for critical areas to eliminate waste. When things are good, people get complacent, so when things turn bad, they scramble to react.
That's always a bad strategy.
Eliminating waste is a core value every company should adopt.
Here's where to start:
Learn to see waste.
So, what the hell is waste?
According to The Lean Way, "Waste is any action or step in a process that does not add value to the customer. In other words, waste is any process that the customer does not want to pay for."
If you have thirty Saas tools that don't help you add value to your customers, it's a waste.
If you have excess inventory, that's waste.
Waste is broken down using the acronym TIMWOODS:
1/ Transport
Transportation waste includes the unnecessary movement of inventory, people, tools, equipment, or products, further than is necessary.
2/ Inventory
"Excess inventory can be caused by over-purchasing, overproducing work in process (WIP), or producing more products than the customer needs."
"In-office inventory waste could be files waiting to be worked on, customers waiting for service, unused records in a database, or obsolete files. "
3/ Motion
A perfect example of wasted motion is when you're doing your poo, but the toiler paper is wastefully located in the other room—which requires you to awkwardly walk to the other room to get the roll of toilet paper.
The analogy applies to every area of your life that involves wasted motion.
Wasted motion includes any unnecessary movement of people, equipment, or machinery.
4/ Waiting
Waiting waste is when people have to wait on materials or equipment.
In the office, this could include waiting for others to respond, waiting for files to be reviewed or approved, ineffective meetings, and waiting for a computer to load a file.
In manufacturing, waiting for waste could be waiting for materials to arrive, waiting for proper instructions, or waiting on equipment due to insufficient capacity.
5/ Overproduction
Overproduction occurs when something occurs before it's needed. An example of this is manufacturing a product before it's required.
6/ Over-processing
Overprocessing is a colossal thorn in many people's side,
"Over-processing refers to doing more work, adding more components, or having more steps in a product or service than what is required by the customer."
Regularly eliminating over-processing waste from your core operating procedures is always a good habit.
7/ Defects
Defects occur when the product or service isn't fit for use.
8/ Skills - The 8th Waste
The 8th and final waste is the waste of unused human talent and ingenuity.
In the office, the wasted potential could include poor training, not asking employees for feedback, placing employees in positions below their skills, and ineffective management and leadership.
In manufacturing, it could be poor training, employees not knowing how to use equipment, using the wrong tools, or when employees aren't challenged to develop ideas to improve the work.
This all may look overwhelming, and you may say to yourself, holy shit, all I am is waste, but that's okay.
Start with one area.
Focus on one thing in a given period and relentlessly eliminate waste.
