Eliminating waste ultimately ensures efficiency and increased productivity
A recent workshop of Bourton Group, attended by over 300 senior managers demonstrated that over 30% of the examples of waste came from simply over-processing of services or activity. In other words, doing too much to something when a simpler approach would be more effective.
When asked why such activity is done, the common response was “that’s the way we’ve always done it” or “it’s our way.”
At a time when leaders are striving to increase productivity i.e. ‘do more with less’; eliminating waste without impacting on performance is easier said than done. The reality, as most people will tell you, is that waste is everywhere and the most pernicious kind is the waste you can’t see!
The Eight Wastes
When we think about waste in environmental and industrial terms, it’s often something that’s physical. Physical waste does exist in work processes, but it is only a small part of the waste that is often present.
The larger proportion of waste is usually activity based. The key to being able to identify wasteful activity is to look at your activities from the customers’ point of view.
Understanding what your customer values is vital in determining which activities are essential and which are not. When we refer to the customer we mean the customer of the activity, not necessarily the end customer. Once you see through the eyes of the customer, it is easier to see activity that is unnecessary. Ask yourself “if the customer doesn’t value it why are we doing it?” The only exception to this rule is if the activity is required for regulatory or safety reasons. Even in these cases it may be possible to find a more efficient solution.
Outlined below are the places where wasteful activity is typically found, also known by the acronym TIM WOODS.
TIM WOODS helps people ‘see’ waste that is otherwise accepted as ‘the way we do things around here.’
All Lean Sigma based efficiency and effectiveness projects will address waste at some stage, typically when the “current state” process is being mapped. This is when waste becomes visible and can be challenged.
It is rare to find a process that is specifically designed for purpose. Most processes have evolved in an additive way, where steps have been added over time to allow for changes in need or to compensate for potential areas of failure in the process.
The challenge is to assess each process step to determine whether it is truly adding value or not. A good way to establish whether something is “value adding” is to ask: “if the customer knew we were doing this would they be willing to pay for it?” Evidence shows that such waste accounts for up to 90% of time or activity in a process so there is a lot to aim for!
Non-value-added activity is defined as that which is of no benefit in the eyes of the customer. Sometimes “non-value added” activity is necessary for compliance or regulatory reasons but again the way this is carried out should be rigorously challenged.
Taking a structured, methodical and data informed approach to eliminating waste will ensure that performance is improved at lower cost, which is a better alternative to making cuts which are more indiscriminate in their impact and unpredictable in their benefit.
Source: Keith Bissett (Chairman at Bourton Group LLP)
*The Year of Disruption follows on from our very successful Years of Digital (shortlisted for an Association Excellence Award), Growth and Diversity. For more information, please visit the Year of Disruption specific hub.