How much waste actually occurs in business? It’s large and wide and often is unable to be fully tracked. Waste can be anything from the mismeasured piece of timber in construction, through to office staff spending time on personal Facebook. As an experienced business coach, I know it’s not an obvious line on the profit and loss statement, but rather it becomes apparent after observing a business and asking relevant questions. Let’s take a look at the various areas of wastes in business, and more importantly what we can do in business to avoid that waste. Waste cannot be entirely removed 100% out of a business however, the business which is able to keep it minimised will do far better.
I’m going to work on the acronym D O W N T U R N S … because I believe that any business which has significant waste will have a downturn in its production, its profit and its sustainability. Actually, it may well be several downturns (plural). When times get tough, the business with massive waste may well not endure.
Wastes in Business
Defects
This is probably the most obvious. When we make a mistake it not only costs time and money to rectify; it can also degrade customer goodwill which has taken time to develop. Defects often occur due to human error (and sure, we’re all human) but they can be limited. Firstly, this comes about by having great systems and procedures. If staff know how to do something and the steps in the process and procedure (ie perhaps double check measurements twice before cutting an expensive piece of marble or timber) that will help. Being focussed on the job at hand helps – so less chatting in the workplace allows team to focus on the task at hand. QA (Quality Assurance) also plays a part. I know a cabinet-maker who consistently sent out faulty cabinets. As soon as we implemented a check in the factory BEFORE the product went out, the installer’s work was halved and customer satisfaction rocketed. Where a business has no processes or has weak processes, then there is always room for error. You cannot rely that everyone will automatically know how to best do something; whereas a system (and possibly even a checklist) will massively improve this.
Overproduction
This can occur a few different ways. One is that a business that produces a product overproduces earlier than needed; stock is sitting on the floor tying up often much-needed capital. Another example is where the team does work and it sits with a boss or supervisor in a bottleneck. This might be an accounting firm where the returns are prepared and ready to go out but need to be ‘signed off’ and that’s sitting with a single person. The delay at approval phase means that the jobs cannot be invoiced, which in turn can strangle cash-flow. Smart businesses will work out their workflow clearly and identify bottlenecks early.
Waiting
No one likes sitting around waiting. Back in the day when we had home delivery of milk, I can remember going out on a run occasionally, and sitting at the depot in a line waiting to pick up the product. Back then I wondered; why isn’t this better organised? I deliver Meals on Wheels and they have us staggered for pickups so when I arrive at 10:45, there is rarely more than one other vehicle in the bay; in and out nice and quick. Unplanned downtime also occurs usually when equipment breaks down or materials have not arrived on time. This, of course, comes back to well-scheduled maintenance and well-organised projects. Insufficient staff, staff absences or overstaffing can also cause people to sit around. Another large part of waiting is the lack of planning and lack of good communication. Great communication is a huge part of any productive, efficient and successful business.
Non-Utilised Talent
There is an expression “Have the right person for the job” and that totally makes sense. You don’t have your high-income earning senior emptying rubbish bins or running down the road to buy a carton of milk because you’ve run out. It’s not about staff being ‘snobby’ about what they do, but having the right resource at the right place. Over-managing and micro-managing often reduces productivity rather than increase it. Identify your staffs’ skills and ability and have them doing what they are good at. If a team member is lacking in one specific area they need to perform well, then train them. Don’t fall into that fear “but what if I train them and they go?” … if you don’t train them, they may well go anyway. What if they stay and outperform your expectations?!
Transportation & Inventory
Waste always occurs when you add time lags in the process. We used to mail (snail mail) everything; now it’s email. What about poor office or plant layout? Do your staff have to walk kilometres in a year to get their printing off the printer? Is your process flow misaligned? Are you double handling product (or a service)? Of course too, are you sourcing a raw product from a distance that takes a far greater transportation cost and time factor? It may be cheaper, but is it actually cheaper?
Then when it comes to inventory – do you have mismatched production speeds or unreliable suppliers, or are you sitting on too much stock? Your sales department must be communicating with the production team.
Unproductive
This category can capture so many different aspects. It may well be lack of skill, lack of know-how, perhaps lack of focus (too busy wasting time on Facebook or gossiping with workmates). It may be lack of direction and instruction, or poor systems which are ineffective. Are you spending hours on emails (filing or sorting through junk)? What about filing? I now have switched my own systems away from paper-based. I take client coaching notes on my iPad using an App that allows quick filing and even quicker access should I need to search. Very little of my admin/finance is paper-based; it’s all filed in the correct computer folder. This means very quick searching capability; versus digging through a filing cabinet or lever arch file. Technology, systems, communication and giving some thought to what you do and how you do it can definitely make us all more productive.
Redundant
Are you doing things a certain way, because “that’s always how we’ve done it”? Another example of redundancy may be that too many people are doing the same thing, overlapping the same tasks. Are tasks being repeated unnecessarily? When you analyse your business or review your processes are there steps which are not required? Are there steps that when you look into it could be done more efficiently? Just because that’s “always how we’ve done it” doesn’t mean it’s ideal, right or even correct.
Not Necessary
Are there steps in your business process which are not necessary? Often a business will data entry say a client contact info into a file setup, then into a quotation, then into their database for emails, then into their accounting program. Instead, have apps and software linked, so you do it once, and only once. Do you have excessive reports? You may want to know the figures around business activities, but be sure to weigh up the return versus the cost. Perhaps the tracking could be less frequent. If we clearly communicate with our customers what they want, then we can deliver that, and not deliver more or not what they wanted. I’m not talking about cutting corners or under-delivering, just be on track, on task and focussed to correctly deliver.
Simple Waste
I had to add this last one. There is waste, pure and simple. Got the wrong product, doesn’t fit/work so throw it out. Printed the wrong report, toss or shred it. Putting a straw in every drink, rather than asking or having some at the counter. Lights on in a building or room which is empty. Driving to one job (or quote) one end of town, then another at the other end of town. Much of this waste once identified can be removed (or at least substantially eliminated) with thought, staff education and again, good communication.
So, after reading this, if you own or operate a business, I’ll bet you know there is waste in your business. Here is your homework: Identify the waste and then work to reduce it and keep it reduced. Need help? Give me a call or email me at donna@donna-stone.com.au and I’d be happy to coach you to reduce waste, increase efficiencies and overall increase your profitability and business sustainability.
Read Why It’s Important to Work ON Your Business – Not Just IN It.
