From transport costs to managing inventory, these are the seven types of waste you should eradicate for assured business process improvement

Mike Aistrop, a training consultant at Renault-Nissan Consulting discusses 7 types of waste that are preventing process improvement.

 

When it comes to the principles of Lean Six Sigma and continuous process improvement within your organisation, reducing waste is one of the priorities.

 

Waste can be anything that either adds no value to your company or its goals and anything that is costing money or using resources unnecessarily. It also relates to your customers and the prices you charge. After all, if you have un-utilised recourses or overspend in certain areas, these costs get passed on to consumers.

 

As part of any process improvement initiative, all members of your team will be educated on spotting waste within their departments or areas of responsibility. But there are seven specific categories that have been identified, which provide a great place to start on your improvement path.

 

1. Transport

Transporting goods to customers or moving parts and materials from one place to another is an essential activity for many businesses, but it adds little value to your end product. Even if yours is not a manufacturing-based organisation, there are likely to be instances where transportation is required, which is quite often a waste. The transporting of materials or supplies will cost money and time, so keeping this to a minimum is important. Trucks, couriers and flights should be continually monitored to help reduce time taken to deliver or receive items and reduce costs when it comes to the running of vehicles.

 

2. Inventory

Until you have sold your product, every piece of that item is a cost to your business. Raw materials, nuts and bolts, ingredients and even finished goods – all of which is known as your inventory - are costing you cash every minute. In addition, there are indirect costs associated with the goods you make and store. Every piece of inventory has to be kept safe, packaged and maybe even transported to different locations. So when it comes to process improvement or supply chain excellence, reducing wasted inventory or improving the management of items is essential for your bottom line and Lean practices.

 

3. Motion

Reducing waste in your organisation extends as far as the time it takes your machinery, employees or colleagues to manoeuvre and carry out tasks.

 

Imagine you run a factory. The time it takes your production line staff to access their equipment, parts or communicate with colleagues all has an impact on the costs, lead times and waste within your business. By continuously reviewing the speed at which physical tasks are carried out, you can ensure that time and motion are kept to a minimum.

 

4. Waiting

The time spent waiting for action, activity, decisions or deliveries is all a waste to your business.

 

As an example, for food manufacturing organisations this could be the time spent waiting for ingredients from a supplier to be prepared and delivered. Equally, for service-based businesses, you could be waiting for an IT hardware order or a consultant to provide advice. Whatever you and your employees are waiting for is a cost to your organisation that can be assessed and reduced as part of your process improvement plan.

 

5. Over-processing

Over-processing occurs when your organisation uses machinery that is too large or unnecessary for certain tasks. Often businesses invest in large-scale equipment to complete tasks quickly or produce vast volumes of products. But this can also be a burden on a business; slowing down the scheduling or causing complications.

 

6. Over-production

Over production, which is caused by making too much or producing goods too early has negative implications for the success of your business. One of the philosophies associated with Continuous Improvement is Just In Time (JIT). This can help your organisation plan the ordering and supply of materials or components as well as supplying your own customers with what they need, when they need it.

 

7. Defects

Many business leaders underestimate the impact of defects in the goods they produce. There is of course a cost implication when defective products are sold to customers, as they often need to be replaced or repaired. But quality errors can have longer term and more substantial affects on your company’s success.

 

The time spent correcting mistakes, paperwork involved and staff resource dealing with less-than-satisfied customers all adds up to create reputational damage and expense. So working out how to prevent these and protect your business is essential for effective process improvement.

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