It’s quite painful for me to talk about football these days, but our new shareholder does seem to be attracting attention with some cost-cutting.
Whilst the feedback he’s received is often critical, it’s usually good business sense to cut waste as a way of improving profit, particularly as it is not uncommon to remove 30% of costs by effectively removing waste.
We consider waste reduction to be part of a wider business/profitability improvement process, linked to continuous improvement. (Our India team are certified to Quality Standard ISO 9001 with continuous improvement being one of their core values).
And when we talk to our clients about waste, we refer to Toyota’s seven wastes and then often recommend a waste audit.
The seven wastes….
- Overproduction. Or doing something in excess of what is required…
This might be doing too much research. Too many drafts of designs or documents. - Waiting. Somebody is always waiting for something somewhere…
This occurs whenever time isn’t being used efficiently: such as waiting for the next stage in an operation or a bottleneck in a process, waiting for a colleague etc. - Transporting. The internal and external movement of goods, people and information…
ie getting your goods to a distributor or it could be your people in meetings where there’s often a big waste element, although the changes to working practices brought about by Covid has had an effect here. - Inappropriate processing. Or using a sledgehammer to crack a nut…
When you’re doing too much work. Or have inefficient tools to do the work. Or you have the wrong people to do the work. You might have a manual process when there’s a good piece of software to work more efficiently, (not to mention AI). - Unnecessary inventory. Something you make or produce that isn’t sold…
You build up stock or Work In Progress (WIP) and then you’re unable to sell it. - Unnecessary motion. Ergonomics…
Poor health and safety policies and procedures can lead to complaints (and even lawsuits).
And if your processes or organisation are poor, you can have unnecessary movement, whilst failure to provide a sound, safe and smart pace to work can also inadvertently increase staff absenteeism or sickness. - Defects. Any error that results in ‘double handling’…
You can make errors on that report you’re writing. You can get the numbers wrong on an invoice. Your databases can have errors on them. If you have defects (and few businesses run without them) then it’s much better to identify them before the product or service has been provided to your customer.
…and what to do with them
We carry out waste audits to help you identify and measure the cost of waste – and create plans to reduce/eliminate them.
And by making significant savings, the benefits go straight to your bottom line.
So Mr Radcliffe, don’t take all the criticism to heart (although I won’t mention the fiasco with appointments of directors and managers).
Rob