You don’t have to be in a manufacturing business to benefit from Lean concepts. Even if your role revolves around business processes and not production processes, you might be engaged in on or more of the seven forms of waste that Lean was designed to minimize.
- Overproduction. This is when you make more than you need right now. When you produce now and your goods aren’t needed until next month, you have already invested raw goods costs and labor costs into your product, with no buyer imminent. This ties up your cash – you’ll only recoup your investment when someone buys your item. In addition, you have to consider where to store the inventory, how much it will cost to store it, how you’re going to find this particular piece when there are a lot of other items also being produced early. This can really snowball.
- Waiting. If it’s sitting on someone’s desk, it’s in a batch, or on a shelf somewhere, it’s contributing to an increase in cycle time for the process in which it’s involved. Speed is a competitive advantage (or disadvantage if there’s a lot of waiting around). If Sam waits until he has 5 similar items on his desk before he processes them, the last item to arrive doesn’t wait very long. But the first item in the batch might have been sitting for hours, or even days. Every minute it sits it’s holding cash.
- Transporting. How inconvenient it is to work in an inefficient kitchen! How far do materials, documents, and even people, have to move to complete the process? We’ve helped with a cycle time reduction on a process where documents went through interoffice mail 3 or more times between 2-3 buildings before the process was complete, and each time the mail added 2 days to the cycle time. It’s not hard to imagine that this group was able to remove 80% from its cycle time on its process!
- Inappropriate Processing. Are you using something fancy when something simple would do the job just as well? Companies sometimes think that technology is the answer to their desire for lean production. If you prioritize creativity over capital investment, it’s possible and perhaps even likely that you can find an easier way that won’t send you to the poorhouse. If you need to make cracker crumbs, for instance, you could purchase an expensive food processor, you could use the blender that’s on the counter already and underused, or you could grab a plastic zipper bag and a rolling pin or meat tenderizer and bang the heck out of the crackers. Either way, you’ll make crumbs.
- Unnecessary Inventory. Above we talked about overproduction and wait time. Not all inventory is on the shelf at the end of the line, ready to be sold. A lot of inventory is caught up on the production floor, partially finished and waiting for the next operation to be performed on it. And – ahem – we’re certain that you wouldn’t happen to have any “just in case” inventory sitting around, raw goods that were a good deal at the time but didn’t exactly fit the specs to be used right away.
- Unnecessary / Excess Motion. What do the people have to do to get the job done? Are they at risk of injury because of the amount of stretching, reaching, stooping, or twisting that has to be done to complete the task? Good ergonomics contribute to speed and sustainability.
- Defects. Any time you have to do rework or discard an item you should be able to hear the sound of money flushing into the sewer. Investment in training now saves money later. And if you need to inspect work, do so early in the process, even at each stage, so you don’t invest the entire production process into an item that wasn’t up to spec from the first step.
You don’t need in-house black belts to find the hidden cash in your processes. Summit can help your work team examine your current process and apply Lean concepts to make it better, faster, cheaper, and with less hassle.