Basic Business Cents
Reducing Waste and Rework
In my experience of working with organizations around the world, manufacturing companies can usually document about 35% of their time, effort, and cost go into producing waste and rework. Service organizations are usually around 60% and government operations somewhere around 60-90%. There are reasons for the difference. Manufacturing companies have had industrial and manufacturing engineers working to improve production processes for years. A big reason the 35% number is so high is those same engineers seldom work on improving processes in finance, personnel, sales, etc. departments. They still have lots of room for reduction of waste and rework. Service and government organizations numbers are higher for the same reason; they just haven’t focused on process improvement. Government figures tend to be higher because of the many regulations that must be followed and tend to be accepted rather than challenged for better ways.
All work is made up of a series of processes and no process is perfect. The modern manager understands that his/her focus needs to be on managing the processes and not the people. People will do the best they can within the processes that they are given and must be trusted to do so without management micro-managing them. Management will receive much more satisfaction in work by providing improved processes for their people rather than constantly looking over their shoulders. A tremendous breakthrough seems to take place when managers accept that their role is to manage the processes and not the people.
With that acceptance of their role, the managers focus on improving the processes and look for ways to reduce wasted effort and cost. Last month, Vern Campbell conducted a workshop and presented a useful method of remembering the keys to identifying waste based on the term, DOWNTIME.
D-defects. This can be the rejected products, service, mistakes, or anything else that is less than desired.
O-over production. Doing more than is desired can result in scrap or reduced returns.
W-wait. Delays anywhere in the process cost time, effort, and therefore money, let alone a decrease in customer satisfaction.
N-non-utilized talent. A tip-off to his cause of waste is to see people standing around waiting, watching, and wondering what to do next.
T-transportation. It can be useful to chart the actual flow of work in a process and look for needless travel or movement. The old saying that the shortest route between two points is a straight line is true but often in our work processes we have the work product going back and forth all over the area, which can cause delays and possibly damage.
I-inventory. Inventory may be necessary to some extent but usually it is evil. It can produce obsolescence, rework, lost or misplacement, theft, etc.
M-motion. This is related to transportation but can be needless movement of people.
E-excessive processing. Examples of this are over-cooking in a restaurant, over-medication by a doctor, over-testing in manufacturing, and over application of regulations in government to cover any possible violations.
The goal is to not only remove the waste, rework, and redundancy as can be found with the above technique, but to streamline the process and improve the output. No process is perfect nor will it ever be. There is always room for improvement. By focusing on improving the work processes, the work product will constantly improve, little by little, better and better, resulting in improved success of the operation, happier employees, and more pride and satisfaction in their work achieved by the managers.