Perhaps you have you seen the word ‘Lean' or heard that Lean principles can help your business.
Maybe you never quite got around to finding out more and yet in today's current economic climate, there couldn't be a better time to consider becoming Lean.
Identifying the wastes in any business process is the first step towards becoming more efficient.
At the core of Lean is the search and reduction/elimination of the 7 major forms of waste:
Defects - how good are your processes at being ‘right-first-time'? Producing defective products or services is pure waste. Use Statistical Quality Control (SQC) methods to understand your processes better and prioritise areas for attention. Prevent occurrence of defects instead of scrapping or repairing.
Motion - how many unnecessary movements are there in your process? Of the workers, machines, and handling? Searching for tools or parts due to the inappropriate location of these items is considered waste of motion.
Overproduction - are you producing more than you need? Producing more than is required by the customer or marketplace generates unnecessary inventory or stock. Inventory that is made and not yet sold impacts upon your cash flow.
Processing - are all the steps in your process ‘adding value' to your product? Unnecessary processing steps should be eliminated. Combine steps where possible
Inventory - or Work in Process (WIP) is material between operations and can be as a result of large lot production, individual processes with long cycle times or as a safety net for machine breakdowns. Standardise lot size and cycle times where possible and find the root cause of machine failures by implementing a Total Productive Maintenance (TPM) programme.
Transportation - similar to Processing. Study if all the movements between processes are required or optimised. Multiple handling does not add any value to the product.
Waiting - is your workforce gainfully employed all the time or is there idle time? A worker waiting for a machine to finish a cycle or recover from a breakdown, waiting for a supervisor to answer a question, or waiting for information or materials reflects an interruption to flow. How more efficient could your workforce be if the sources of their waiting time were eliminated?
In fact there is also an 8th waste - the waste of human potential - use all of your resources to their maximum.
Many companies prefer to spend much time and money ‘managing' their waste and of course recycling is now a huge business. And whilst waste recycling is good for the environment and is to be encouraged, it can still be a cost.
Many companies that I see are justifiably keen on their recycling credentials, constantly searching for more cost-effective ways to recycle. Comments like ‘We can actually get someone to pay us to take away our waste and make a profit!' can be heard.
Yet the bottom line is simple - prevention is better than cure and waste elimination is more profitable than recycling.
© David Cooke 2009