EIGHT PROVEN ACTIONS to increase profitability by reducing wastes, and improving productivity.
Productivity improvements can begin in very simple ways. Look for activities that waste time and resources. Find ways to remove clutter and improve process that will save time and remove waste.
Let’s start by looking at waste.
What is Waste?
Waste = Non-value adding activities
What is Value?
Value is defined by the customer of the product or service. Value is the minimum number of activities required to move a product towards what the customer is buying. If the activity doesn’t add value, it’s waste.
The key question to ask:
“Are customers willing to pay for this?”
If the answer is no, then it is waste, and the activity should be eliminated. Value is defined by the customer for a particular product or service. In order to produce a product or service we perform at a number of activities.
Optimally we want to use the fewest number of activities possible in order to move our product towards its finished state. Any activity that is not adding value to the customer is waste.
When you are looking around your organization remember TIM WOODS
- Over Production
- Over Processing
Transportation waste happens by unnecessarily moving things around, materials, finished products, documents or people between processes.
- Make sure everyone knows where to find things and put them away when finished
- Know where raw materials, work-in-progress or finished goods are housed until the next step in the process
- Use the most efficient routes
- Stage processes close together as possible to minimize transportation
- Optimize material handling systems and consolidate storage areas
Inventory waste is caused by excess quantities of supplies, finished products, raw materials, work-in-progress.
- Keep raw materials and finished goods inventories as small as possible
- Use Just in Time inventory techniques – ordering & receiving inventory as needed for production and customer sales to produce goods, and not before
- Make things only as quickly as the customer wants them
- Implement a Kanban system (Japanese term meaning “signal”)
- Limit the build up of excess inventory at all points in production
Motion waste arises from the unnecessary movement of people, documents, materials or machines. Motion waste happen when employees must walk long distances to complete their tasks.
- Move equipment as close as possible to where it is used. Don’t overlook the time it takes for your employees to do their jobs – placing equipment or supplies conveniently can save many hours in lost productivity. Eliminate Treasure hunts!
- Place materials in a way that reduces the risk of a repetitive strain injury caused by bending or stooping
Waiting waste happens when work stops or is paused. This is caused by approvals, materials, technical issues, or others waiting for information to be retrieved in order to continue. Waiting waste can be as simple as walking around looking for a tool or waiting for the papers that someone is photocopying.
- Review and redesign your processes to set up the right workflow
- Incorporating a digital process may be the first step in moving towards f
- aster approvals
- Implement Standard Operating Procedures
- Cross training teams so they can be re-tasked to other areas as needed
- Start meetings on time! If meetings are consistently start late, find out why and take action! Stop tardiness! It has a snowball effect on the rest of the team. If one person is late for a meeting it affects everyone’s
Over-production happens when things are produced ahead of customer or process demand. Over production can occur because it is difficult to determine what is necessary for re-order. Don’t guess at customer demand.
- Balance supply and demand
- Purchase only what is needed based on usage and supplier lead times
- Produce only actual demand rather than forecast sales
- Use “Just in Time” inventory techniques – order and receive inventory for production and customer sales to produce goods as needed and not before
Over processing happens when the customers’ standards and expectations are not fully understood, and the product goes beyond the requirements or standard of the customer. It is performing processes that are not required by the customer, and costs time and money. It’s like making a fully loaded pizza when the customer ordered a small cheese.
- Clarify the customers’ standards and expectations from the beginning
- Only perform processes necessary to meet the customers’ standards and expectations
- Use appropriate processes and avoid overly complex machinery or
processes, if possible
- Value stream mapping can identify the root cause
Defects are mistakes resulting in defective work, requiring rework or
other corrective action(s). Defects cost time and money. They occur when non-standardized work is common, and procedures are not readily available.
- Focus on preventing defects before they happen rather than resolving problems after they happen
- Implement “Poka-Yoke”, (a Japanese term which means mistake proofing)
- Training and posting work instructions prominently will ensure that all employees are aware of the Standard Operating Procedures (SOPs)
- Simple job aids like checklists help avoid defects
Skills wastes arise from under utilized abilities of your staff. It can result from poor communication, lack of teamwork and insufficient training.
- Value your people
- Look for what they bring, unlock the hidden talents that may not be a part of their assigned job
- Provide learning opportunities
- Engage employees in process improvement activities
- Empower teams to suggest and implement improvements
- Cross train employees
- Remove wasteful administrative tasks
- TAKE SMALL STEPS
Practice the key actions outlined here to put your company on the path to a more productive and profitable future.
- THINK DIFFERENTLY
Think about your company differently. Imagine where you want to be. Dream BIG! Map the steps needed to get there.
- MAKE A COMMITMENT
Commit to incorporating a mindset of continuous improvement. Companies who do are more profitable and competitive in the global marketplace.
- TAKE A DEEPER DIVEWant to go further and enhance your productivity and profitability? GO Productivity will help you reduce waste and improve productivity. An assessment of your company strategy, operations and goals will deliver an executable road map, and our coaches are here to help you journey to success.
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