by The HLH Team
To run a business, at least part of you has to be an optimist. Bad times can always improve, and good times can always get even better. With that steadfast optimistic spirit, it’s normal to build our companies to be able to produce more than we’re currently selling so we have room to grow.
However, the ability to over-produce comes with the danger of producing too much.
Over-Production is the most feel-good of the 8 wastes. When we’re producing a lot, it feels like the good times are rolling. We have a nice cushion in case the orders start coming in and the stacks of products that are ready to sell gives us the welcome perception that our company is prospering, even if it’s not.
I’ve fallen victim to the indulgence of Over-Production. It’s nothing to be ashamed of; it means you think you have a great company. But it can become a very expensive indulgence if the expected orders do not materialize. That’s when the unsold product makes you feel ill instead of optimistic.
Pull not Push
Traditionally, companies have often operated on the principle of having products ready to go when the customer comes calling. While this is handy when the customers do come knocking, it’s also a gamble.
Lean methodology teaches us about “just in time” production, which operates on customer’s “pulling” production with their orders instead of the company “pushing” production with its optimism. Switching to a just in time approach is not easy, and often involves substantial changes to the production process, but for companies suffering from chronic over-production it’s well worth looking at.
It’s natural to assume that the larger the batch size, the cheaper the cost per unit.
That’s often, but not always true, especially when larger batch sizes lead to overproduction.
Companies that over-produce tend to tie up a lot of cash in unsold products, which reduces their liquidity and limits their ability to borrow money from the bank.
If your company requires periodic short term operating loans, this could be a serious problem.
It’s Not Just Manufacturing
Over-Production waste doesn’t just happen to manufacturers. Think of the last time you went into a meeting with 5-10 people coming and printed about a dozen handouts just to be on the safe side.
If you’re buying donuts for the staff, count the staff first. If you’re buying binders, check to see if you still have some first. Over-production sneaks into our lives in many ways, often disguised as the feeling of “covered all our bases.” The best way to fight this waste is to learn how to operate your business without a buffer of extra products. Staying close-to-the-rocks in terms of production can be uncomfortable at first, but in the long run, can reward us with less shrinkage and more cash flow.
by The HLH Team
In Deadly Waste lingo, “transportation” refers to the movement of materials and “motion” refers to the movement of people. My fingers are in motion right now, and when I print this off I’ll be in motion to the printer, which is 3 steps away. I bought it because I print a lot and the nearest printer was about 20 steps away. Printing documents meant changing rooms, being chatted at, and usually losing my focus by the time I sat back down.
Going to meetings can be a big waste of motion. While face to face meetings are important sometimes, sending our staff out on too many of them leads to excessive time in transit and waiting around in other workplaces. Before sending people out to meetings, think about if it’s necessary for them to go or if it can be done over video conferencing.
Everything Has a Home
5S in action: Trevor Lukey’s immaculate garage.
How much time do you waste looking for things? From staplers to front end loaders, if a piece of equipment is moved and not put back (or if it didn’t have a home in the first place), it leads to inevitable wasted motion and morale-killing frustration.
Have a home for commonly used items and make it clear to people that anyone who takes things must put it back. If someone uses an item a lot, consider getting them one of their own so that he or she always knows where it is.
Knowing where everything is includes you, too. When you leave the building, especially if you won’t be near your phone, tell someone central.
Running around looking for the boss is a frustrating endeavor that wastes time and energy.
If you want to delve deeper into workstation organization, research “5S” to learn more about how to keep the world around your workspace clean, clutter free, and organized.
Spaghetti Mapping
Grab a piece of paper; make it a big one. Sketch out your immediate work area, whether that’s an office or retail counter. Include as many places where you travel in an average day as possible.
Keep that paper nearby and, every time you go somewhere, draw a line. A line to the coffee machine, to the stockroom, to go find a hammer.
Using a wavy line for distances off the paper, draw all your workplace movements for the day.
Looking at your paper, ask yourself where you went the most. Could that trip be made a little shorter? Ask yourself which trips were useful and which weren’t.
Could that 10 minute hunt for the hammer have been avoided if the hammer had a proper home?
by The HLH Team
Remember that thing you bought, the one you were excited about only to discover, once you got it home, that it was defective? As frustrating as that was for you, it was probably much worse for the manufacturer.
After that experience, you were probably soured on that brand for a while. You probably told family members and possibly people outside your immediate circle. If you were really ticked, you wrote a letter, a nasty Facebook post, or a bad review about it. Word of mouth is both the most valuable and volatile form of marketing. While great word of mouth can reap overnight success, bad word of mouth is toxic.
That’s just one of the ways that Defect waste costs money.
Defects can be as simple as sprinkling cinnamon on a latte instead of vanilla, or as serious as installing faulty brakes in new automobiles. Whether 1 latte is re-made for free or 100,000 vehicles are recalled, defects waste money, and sometimes damage reputations.
Take Time to Train
It’s a pattern. You’re in the heat of your busy season, a big order has just come in, or someone has left suddenly and you need to replace them: fast. The new employee gets thrown into the deep end with no time for formal training. They’ll “train” on the job, which is translated as “they’ll learn the same bad habits as whoever they talk to first.” This is how defects happen.
The key to avoiding defects can be as simple as slowing down, taking a breath, and training.
If you’re too busy, delegate a trainer. If the trainer is too busy, find someone with good habits to be a mentor. Throwing green recruits into the trenches is an easy an expensive habit.
Before your new employee flips burgers, files a tax return or changes a tire, make sure that someone takes the time to walk him or her through the required process, make expectations clear, and stick around to watch him or her perform the task.
After that, educating your employees about the costs of defects will open staff eyes to the need to maintain a standard of quality. Not only will the training result in your existing and new team members cutting down on the defects – it will also improve your chances of retaining your people and help them succeed.
Check your Processes
Processes are cumulative. A simple clerical error early on can, if not caught, lead to serious defects as it moves through the process. Cutting corners by skimping on proofing is a potentially costly gamble.
All of this checking, quality control and training takes time and, by extension, money. But consider the true cost of a defective product in lost revenue, time (to go back and fix the problem), and bad word of mouth.
by The HLH Team
All companies produce something, because all companies need to sell products or services to make money. Whether you’re selling flashlights, legal advice or clean windows, your product is the lifeblood of your company.
Everyone who sells something must confront the difficult question of “worth.” It’s up to us to decide what to charge for our product, and precisely how much we need to put into that product to get the desired and necessary price. If we don’t put enough into it, our customers may not think it’s worth it. If we put too much into it, we risk spending money on the product on details that customers aren’t willing to pay for.
This is the waste of over-processing.
Polishing the Cannonballs
Bob firing off non-polished cannonballs at the Plains of Abraham in Quebec City.
People who manage and operate businesses are usually passionate about what they do.
They’re often entrepreneurs and usually get to where they are from the strength of their ideas and commitment. When we’re passionate about our product, over-processing comes pretty naturally.
Picture the product created by your company, whether it’s tax returns, a restaurant entree or an engine, one that you’re most passionate about. Are you putting only as much into this product as the customer thinks it’s worth, or more? Over-processing can be as simple as applying unnecessary aesthetic touches or researching 5 examples for a customer when all they needed was 3.
It can be hard to pinpoint over processing because your average customer won’t tell you that the product is better than their perceived value. But if you ask your customers what they like best about the product, and listen carefully to what they say, you’ll hear that the one characteristic they don’t mention may be the over-processing.
As we sell more and more of a product, over-processing can easily become engrained into processes and hard to eliminate or even identify. Ask someone whom you trust, who represents your target client, and who has little or no history with your product to tell you what they think it’s worth and why.
Document your current Process – Then Plan Ahead
Whether it’s a new or an established product or service, map out your processes for making it.
A process map can be as simple as listed steps on paper or as complicated as establishing a flow chart or a full value-stream that involves all aspects of production. If you’re new to this concept: start small.
Grab a pen and notepad and start jotting down steps as you recall them.
Once you’ve mapped out every step you can think of, take a break. Do not come back to your list for at least a day. When you look at it again it needs to be with objective eyes. Update the list with the steps and procedures that may not of thought of on your attempt. NOW look for the WASTE! Identifying waste may involve targeting a part of the process that you’re passionate about. Remember waste is anything that is a duplication of effort or is something that your customer is not willing to pay for.
Passion is admirable, but in business it needs to be tempered with rationality.
by The HLH Team
We all know this one well. The most downright annoying of the 8 wastes, waiting eats up profits by literally making people stand still.As a business owner, I think of waiting this way: every staff member has a clock attached to him or her, and every minute costs a certain amount of money. Salary (plus benefits) and productivity tick away as he or she waits.
The next time you’re in a meeting where 10 people are waiting for number 11, guesstimate what each one is paid, add about 35% for benefits and other costs, break it down into 15 minute segments. The final number will shock you, especially if you’re the one signing the cheques. From bathrooms to sales reports, we wait for things every day. While some waiting is unavoidable, much of it is surprisingly easy to eliminate.
Seconds Accumulate
While long periods of waiting are blatantly obvious, shorter periods of waiting, especially when built into processes that we repeat often, can be costlier, as well as nearly invisible. Examine your company’s repetitive processes, whether on an assembly line, at the cash register or as part of everyday in the office, and look for tiny periods of waiting. A few seconds where someone is waiting on the person before them, when multiplied by many thousands, accumulates into major waste.
Finding the waiting waste within processes can be difficult as it’s often almost invisible. This is a good opportunity to empower employees to take ownership for the efficiency of their own processes. Eliminating waiting waste that’s engrained into processes is sometimes easy and sometimes excessively difficult. You’ll need to decide, via calculation of time savings, how much time you’ll save by making a change. Do the calculation and you may be surprised by the savings you can attain and still come out on top.
Simple Solutions
Targeting obvious waiting waste can be an easy win for people just starting out with Continuous Improvement. If every person in the office runs for the coffee machine at the same time at break and spends an extra 10 minutes making coffee, invest in another cheap coffee machine so they can get back to their workstations on time. If you find yourself waiting in boardrooms for everyone to arrive to a meeting, ask people to put the meeting into their calendars and ping them 15 minutes before it starts. If your team is on time but the paid professional is late, stipulate beforehand that they will be paid from when they arrive and not from their appointed time.
Sending people out to meetings is an invitation to waiting waste, from sitting in traffic to waiting in offices.
Unless the meeting is important enough to demand face to face, consider video conferencing / online meeting solutions.
by The HLH Team
The idea of wasting employee talent came late to the deadly wastes. In the original Japanese version, there were 7 muda. It wasn’t until the methodology was brought into American factories that “Talent” was added. Our employees are our single greatest and most wasted asset. When an employee bites their tongue about an idea, refuses to think for themselves or spreads rumors, the loss can’t be measured as easily as a defective product or part that needs repair. But as any manager, who has taken employee engagement seriously will tell you, the benefits of your staff caring more about their company are massive.
Untapped Ideas
How often have you paid for an external “expert”, who had very little experience with your business, to advise you
on how to run your business? Chances are that whatever idea that expert had, your employees had that same idea a while ago, but were either never asked or didn’t feel empowered enough to speak up about it.
Continuous Improvement is about ripping down silos and making your company open to new ideas and empowering all employees to think of ways to make the processes in their work day more efficient. This is easier said than done and often requires a fundamental shift in how management interacts with employees on a daily level.
Empowering is not about making fancy policy. It’s about relationships that are built with consistent interaction and involvement with employees. You can’t tackle wasted talent from the executive suite. It needs to be done in hallways and break rooms and workspaces, and it needs to be consistent.
When an employee comes to you with an idea, it’s your job to make that person feel that coming to you was the right choice. If you don’t like the idea, take the time to tell him or her why instead of dismissing it and walking away. This is a huge disincentive to an employee who genuinely wants to help the business succeed.
Finding a Balance
When we hire someone, it’s usually to fill a certain gap in the company, either because someone else has left or expansion demands it. Once people fill the gaps they were hired for, we’re often reluctant to offer them opportunities that would allow to them to grow beyond that gap. It makes sense to build company structures that employees need to fit into, but it’s also important to balance structure with individuals’ potential capacity to grow beyond their roles. Stagnation in a role can often lead to attitude and morale problems.
Employees that are over or under qualified for their jobs is a key cause of talent waste. Being under-qualified (i.e. being thrown in over your head) can lead quickly to feeling overwhelmed, frustrated, and potentially could cause expensive defects.Being overqualified for a job has the obvious waste of paying too much in salary than the job is actually worth. Often highly paid staff will be reluctant to delegate jobs they’ve “always done” even as they grow beyond them.
