8 Mistakes Companies Make. It's Cash In The Trash!
Most companies are riddled with waste.
They do things for the sake of doing them because that’s what they’ve always done. Any action or step in a process that doesn’t add value to the customer is waste. The first step to taking your cash out of the trash is to see the destruction.
Once you see the waste, you can take measures to correct them.
See your TRANSPORT waste.
It’s anything that moves further than necessary.
The movement of people, tools, inventory, products all apply. Excessive movement can lead to product damage, human injury, or fatigue. Stop moving things so often.
Move things closer together, consolidate shipments, look to reduce excessive transport.
See your INVENTORY waste.
The most brutal part of inventory waste is the inefficient allocation of capital.
Imagine stacks of cash just withering away on your inventory shelves. By seeing the inventory waste, you can prevent surplus. Once it’s in stock, it’s too late.
Learn to execute just-in-time inventory.
See your MOTION waste.
Motion includes unnecessary movement of people or things, whatever those things are to you.
It’s team members who have to reach for materials, walk to different stations, search for files, or the dreaded DOUBLE ENTRY of data. Wasted motion is inefficient and a killer to productivity. Seek to correct useless motion.
Decrease motion to increase efficiency.
See your WAITING waste.
Waiting is people waiting on material, equipment, or other team members and idle equipment.
If something is waiting, it’s not producing the desired result. Waiting waste includes:
Waiting for someone to respond.
Papers that need to be reviewed.
Ineffective meetings.
Waiting for materials to arrive.
Eliminate waiting wherever you can.
Improve your processes, level out the workload, and see areas that can quickly adjust to new demands without waiting.
See your OVERPRODUCTION waste.
Rather than producing things when needed under ‘Just In Time,’ most people prefer ‘Just In Case.’
It’s making extra copies because you fear you’ll lose the first copy, generating reports nobody reads, over-explaining, or producing products in larger batch sizes. Overproduction makes us feel like we did something useful. Instead, it results in higher costs, requiring more capital, increased lead time, and confusion.
Cut out anything that isn’t necessary for the near future.
See your OVER-PROCESSING waste.
Over-processing plagues all companies, large and small.
It’s when you do more work, add more components, or have more steps in a product or service that adds no value to the customer. In the office, it would be:
Generating more detailed reports than necessary.
Having too many steps in the purchasing and sales processes.
Needing signatures on a record.
Double-entry of data, or
Having extra steps in a workflow.
Most things we do include some form of over-processing, which is why you need to see it.
Look for all the ways you over-process within your daily activities and remove them.
See your DEFECTS waste.
Defects occur when a product cannot be used.
It’s when you ship the wrong material to a customer, the product is broken upon arrival, or warranty claims are high. The best solution is to see these issues before they end up in the customer’s hands. Look for the most frequent defects and seek to resolve them.
Redesign your processes, so it doesn’t lead to defects.
See your SKILLS waste.
The 8th waste is unused human talent and ingenuity.
This occurs when companies separate management from employees. When leaders don’t engage with frontline workers’ knowledge and expertise, it’s impossible to improve processes. “The people doing the work are the ones who are most capable of identifying problems and developing solutions for them.”
The first step to eradicate skills waste to recognize it exists and have a process to identify it.
Waste plagues all operations. See to improve one waste at a time and imagine the results you and your company will produce at the end of the year when you improve waste.
