By Ross Elliott, Business Consultant.
Is your business doing well? Are you looking to expand it? If so, you will know that it will be one of the riskiest times for your business. The most common way a business will try expanding is by hiring more staff or investing in more equipment. However, this does not always lead to delivering better value to your customers.
Before any business looks to scale-up their operations, it is vital they review their current processes and remove any waste.
What do I mean by waste? Waste is any step or action that is not required to complete a process successfully. When waste is removed, only the steps that are required to deliver a satisfactory product or service to the customer remain in the process.
There are eight main types of waste, which you can remember by using the acronym D.O.W.N.T.I.M.E.
Defects – Efforts caused by rework, scrap, and incorrect information.
Overproduction – Production that is more than needed or before it is needed.
Waiting – Wasted time waiting for the next step in a process.
Not utilising talent – Underutilising people’s talents, skills, and knowledge.
Transportation – Unnecessary movements of products and materials.
Inventory excess – Excess products and materials not being processed.
Motion waste – Unnecessary movement by people (e.g. Walking)
Excess processing – More work or higher quality than is required by the customer
If you have excessive amounts of any of these wastes in your processes, then there is definitely opportunities to save money and improve quality, by reducing or removing it.
How can you go about this? There is a philosophy called ‘Lean’ that you can follow. Lean allows you to deliver maximum customer value in the shortest sustainable lead-time, eliminate waste, and continuously improve your processes.
It does this by giving you the tools needed to measure your processes in a way that identifies waste. Once your processes are ‘lean’, you will be in a much better position to scale-up your business, knowing you are not scaling-up the non-value add parts of the process as well.
Lean can be applied to every business and every process. It is not a tactic or a cost reduction program, but a way of thinking and acting for an entire organisation.