LEAN PRINCIPLES FOR SME’s Principle 2 – Eliminate Waste

 

Are your manual processes a barrier towards greater productivity?  Do you engage and empower your teams to strip away waste & inefficiency?  Do your staff embrace continuous improvement as the norm?

My 5 blog series for business owners and leaders, will focus your efforts to emerge renewed and reenergized after lockdown

 

Principle 2 – Eliminate Waste

Olympic swimmers work tirelessly to perfect their stroke, their breathing, even the milligrams of unnecessary weight in their costumes, caps and goggles.  They are perfecting their streamline shape and limb positioning to achieve the highest possible speed, with the minimum possible friction and energy expenditure in every stroke. The difference between gold and silver can sometimes be in 1000’s of a second, but it’s the difference between winning or losing.  The second principle of lean is to eliminate waste and activities that don’t add value to the end product.

By way of example, during my consulting days, I visited a food production facility whilst a line change was in progress. The workers were being rounded up by the supervisor and all dawdling over to the next line. There was no sense of urgency to get production in full swing.

The supervisor spent 20 minutes rounding up the team and mobilising them from one station to the next. The raw materials weren’t ready for start-up, and the supervisor was running round like a headless chicken trying to get everything in place. The eight people, and half hour late start cost the business 4 hours of wages, to change lines.

The manager explained they prefer to do overtime during the week than put on whole extra shifts on a weekend. This is a perfect example where the Lean principal to eliminate waste would be to improve the supervision, and line set-up to reduce or eliminate the overtime all together.  If we add into the mix, the profit margin of the additional volume of product they could produce in an extra half hour of production every day, that begins to add up to a significant loss in revenue and profits every year.

In a lean environment, this demonstrates so many areas to improve.  The waste might be eliminated so that the operators never have to walk across the production rooms to different lines; maybe a trolley makes the rounds ensuring the required raw materials are ready and waiting for the crew so they’re never left waiting to start the line.

“Lean thinking is a relentless quest to do more with less;

the continuous mindfulness and effort of everyone in the

business to eliminate all activities and costs that don’t

add value to the end product or service, that customers

would be willing to pay for”

 

Take the Waste Challenge

There are many categories of waste that can be explored in most businesses.  Toyota created 8 key areas. Take the waste challenge, and see how many of these you can start to eliminate in your own processes.

1. Over production

Producing more than you need is costing you time, materials, effort and cash sitting on the shelf if the products are waiting to be sold. The principal of regulating production based on demand expands on this idea.

2. Waiting Time

As we saw in the food production line above, if the work isn’t balanced and coordinated you could find idle time in the work flow. Working on an automated welding line in the USA, one of the key productivity savings we achieved was through slowing the line down to help operators achieve better quality and greater output. 

3. Work Flow & Movement

How do files, documents, materials or parts make their way round the workplace?  Are employees waiting for their work, or are they a bottleneck?  If one team is seen to be slacking whilst another is sweating to get the work done, this can cause resentment and conflict between departments.  A flexible workforce allows you to move people between work stations to avoid bottlenecks.

4. Over processing

How many times does that piece of paper get shuffled on the desk, or between staff & departments? How many times do parts or materials get shunted from one place to another due to lack of space or poor organisation and layout?  Duplication in handling not only increases the possibility of errors, poor quality, or damaged goods, but slows down the output of your teams.

5.  Inventory

Keeping excessive stock means money on the shelf has not been recovered in a sales invoice.  If the right information systems, and mechanisms are put in place a ‘just in time’ process can reduce the levels of stock on the shelves, keeps your cash in the bank and reduced the amount of space you need, so you could be reducing rent or premises costs.

6.  Repetitive Movement

Repetitive or unnecessary movement leads to a deterioration in performance. and in a physically demanding environment can also result in repetitive strain injuries leading to time off work. How far and how often do your team have to walk to the photocopier/printer?   That all adds to your cost and potentially a deterioration in employee motivation and engagement.  

7.  Defects

If work has to be corrected, or faulty parts are rejected the costs add up these are not reported, monitored and corrected timeously.  The same case study mentioned above, of the automated welding line, highlighted how quality deteriorated due to hidden issues causing productivity to be only half of the potential realised once the issues were analysed, measured and rectified.

8.  Unused Brain Power

If you’re not harnessing the creativity and ideas of your team, you could be missing opportunities.  By involving individual team members, getting to know their real skills and capabilities, or stretching them to try things they may perceive they’re not capable of, you’ll gradually get to know them better and understand how you can give them the opportunity to really demonstrate their true worth. 

The next blog in this series, will focus on the third Principal of Lean – regulating your throughput to demand.  This will review the most efficient arrangement of all the value creating steps in your value stream, and strive to synchronise your production or service offering, based on client demand.