Nine Types of Waste in Small Businesses
Nine types of waste in business can be eliminated with good (BPM) Business Process Management via systematization. Sadly, reducing company waste is a huge untapped bottom-line enhancer for many small businesses.
As a result, many business owners miss out on the benefits of eliminating waste, by assuming that business process management is for BIG business only.
Proponents of Lean Management have identified Seven Types of Waste leaving out a couple types of waste that we see occurring in small businesses routinely.
This subject of waste has been written about extensively, but I’m going to “Philipbuster” here on that topic. Whereby, many so called “experts” talk, we “DID IT.”
Seven Types of Waste Sited by Lean Experts
- Defects - Products that do not conform to customer specifications
- Overproduction - Things not asked or paid for by customers
- Inventories – (i.e. Parts/stock sitting in a warehouse on hold for production)
- Extra Processing - (i.e. over-inspecting, rather than implementing processes to improve production). Rework or extra handling, due to defects and mediocre processes.
- Unnecessary Motion of Employees - (i.e. having to walk too far to wash hands or get tools)
- Unnecessary Transport and Handling of Goods - (i.e. Parts/stock scattered around the facility instead of a convenient location, close to production)
- Waiting/Down Time - (i.e. waiting for parts/supplies or approvals, to complete a process)
Each type of waste listed above causes multiple frustrations that business owners would be happy to eliminate. Sadly, many small businesses not only tolerate these type waste, but believe removing them, is darn near impossible. As a matter of fact, those seeking excellent job shop management, by purchasing small manufacturing management software, whereby hoping for a quick-fix for waste frustrations, are usually disappointed.
How to Eliminate Waste - Via Systems Defects
Locate the root cause of Defects, with our System Buster Locator tool. As a result, knowing the root cause, you can eliminate or reduce defects by implementing a control system, or update a current control system. ISO refers to a System Buster Locator tool as a Corrective Action system.
Our Quality Control Checklists templates will speed up the process of utilizing QC Checklists to minimize defects.
Our Document Change/Update feature will aid the continuing improvement of all control systems. Thus, revisions to documents remain current.
Use the Document Repository feature for keeping the latest revisions of your Quality Control Documents accessible. As a result, everyone in the organization has access to updates/revisions in REAL TIME.
Our Operations Manual’s Control Checklists, Procedures and Policies, etc. will ensure producing (to specification) what on the Work Order/Job Ticket, and nothing more.
Use the Document Change/Update feature for the continual improvement of the Quality Control and process systems.
The System Buster Locator tool will locate all non-conformance in overproduction.
The Job Ticket/Work Order Update system will improve any overproduction not addressed through the System Buster Locator Tool. Example: an operator spots something during production, that will improve future over-productions. This is aka Preventative Action.
Use System100 Inventory-Requisition system to empower employees to requisition (not purchase) consumables. As a result, they can keep their work station operating without interruptions.
Our Video-Tour of a Systemized Company show what production areas should look like. Without a system of cleanliness, you have cluttered inventory, therefore CHAOS!
See the 100% System of Cleanliness documents.
Again, the System Buster Locator Tool will identify non-conformance. This will ensure inventory systems are up-to-date dated and the assets are well-organized and free of clutter.
Again, our System Buster Locator tool used for locating non-conformance in production, thus identifying rework/extra-processing in any area. It finds the root cause, and calls for the change/update in an existing process/system, or a newly-designed process/system. Moreover, ensuring the elimination of extra processing.
Use the Document Change/Update feature for the continuing improvement of the Quality Control System.
Use our Operations Manual’s Quality Control Checklists as a template/guide to set up YOUR Customized Quality System. This will ensure the elimination of rework with is unnecessary processing.
Unnecessary Motion of Employees
Again, our documents concerning 100% System of Cleanliness, along with our Video-Tour of a Systemized Company, will show you what your production areas should look like. Clutter and inconveniently-located items used to produce your products, leads to extreme waste of inventory and time. The 100% System of Cleanliness, speaks to having a convenient location for every item. This will keep employees from having to walk too far are looking all around a facility to retrieve an item.
We went into detail about the 100% System of Cleanliness in the book: "System Busters; How to Stop Them in Your Business." One of the things we did at a printing company was to improve the filing and purging of Job Tickets. Therefore, we implemented a Job Ticket Filing Control System! This one improvement saved thousands of hours of wasted time over the years. Before putting in the Job Ticket Filing System, it would take up to two hours to locate an old job ticket. Sound familiar?
Unnecessary Transport and Handling of Goods
Again, not to be redundant, but continually improving on the processes with which you operate can reduce this type waste.
Using the 100% System of Cleanliness as a model, the inventory of goods, the consumables used to keep a work station operating, OR the goods used for producing your products, should be conveniently located.
System100 Inventory-Requisition System empowers employees to track and requisition the consumables needed to keep their work station operating without interruptions.
Right-on-time goods received for production of products should be from a trusted vendor. Example: Using a supplier who is conveniently located near your company, and who makes very few errors in delivering your goods. The System Buster Locator Tool has a feature that allows for tracking and reporting Vendor Errors. Use these reports to put non-conforming vendors on notice, to either improve their processes for delivery of error-free goods OR, face replacement by alternative vendor. As a result, when a vendor receives the evidence/reports of their mistakes and defects, you normally get instant compliance.
Waiting / Down Time
Be sure to install the 100% System of Cleanliness in your company to avoid running to and fro looking for items, causing down-time.
Again, the Operations Manual’s Quality Control Checklists templates will guide to implement controls to minimize waiting, resulting in downtime.
Utilize the System Buster Locator tool to improve processes (i.e. Quality Control, Data Entry Control, and procedures, etc.).
Use our TimeTraxx - floor data collection system to pull reports on waiting/downtime. This will trigger using the System Buster Locator and the Document Change/Update feature to improve the process that’s causing downtime.
We also suggest you take advantage of unavoidable Waiting/Downtime by using the System100 Task System. Also use the Operations Manual’s Daily Routine Checklists to prompt employees to utilize downtime, enabling capture of otherwise wasted time. As a result, this can improve the company in areas not normally addressed i.e. special building maintenance etc. Daily Routine Checklists could prompt employees, for example, to perform unscheduled Preventative Maintenance, or get ahead on scheduled repairs originating from the System100 Repair Request feature.
Two More Types of Waste | Seldom Removed in Small Business
We have many years of experience in reducing chaos and waste in businesses by implementing systems. As a result, we will point out two areas of waste not generally considered WASTE. However, make no mistake this type waste is detrimental to small business.
Confusion of Personnel
Brought on by miscommunication, either verbally, or with use of poorly designed systems. As a result, employees with become disillusioned with a company, whereby they resign or don’t put forth their best effort. In either case, this causes waste! If they resign, management uses time to replace and retrain a new employee. Time is money! And lost money is WASTE!
Untapped Employee Potential
When an employee doesn’t have the right tools to perform their job in a timely manner, it is waste. Additionally, valuable time lost, when an employee doesn’t receive a systematic orientation when joining a business. Whereby, learning the ropes and getting up to speed by the new employee job requirements takes time. Again, Time is money! And lost revenue is WASTE!
Another example of untapped employee potential is, not utilizing effective quality control and service control checklists where stupid mistakes are common. As a result, it causes employee frustration, discouragement, and lack of enthusiastic performance. Again, this lack of controls may result in employee resignation or poor job performance.
System100 will help you be Pro-active about Company Waste.
There are similarities and redundancies in stopping the nine types of waste in business as we pointed out systems for drastically reducing the cost of waste and its affects.
In fact, our book "System Busters; How to Stop Them in Your Business" details how WE attacked these types of waste in our company, step-by-step.
When we started this mission of bringing our business to order via systems, we developed static manual systems. With mission success, we decided in 2003 to turn our manual systems into interactive systems. As a result, Ebiz Products, LLC was born and System100 software became a reality. We support and coach businesses worldwide with System100 we now call the Organizer for small business!
In conclusion, if you are seeking job shop management software, field management software or a great business process management software that can be customized, consider us.
Did I mention - Great Systems Work!
Philip Beyer, founder/president of Ebiz Products LLC and founder of Beyer Printing Inc. in Nashville Tenn., is a chronic entrepreneur, business systems analyst and consultant. Author of "System Busters: How to Stop Them in Your Business" and recipient of an InterTech Technology Award for the design and development of System100 business process management software. Beyer speaks to business owners across the country on how to bring lean, sustainable order to their businesses. Contact him at (615) 425-2652.