Remember the old saying, time is money? It's still true! And wasted time represents a huge opportunity for you to improve performance and reduce costs. How much wasted activity do you think there is in organisations? Ah go on, have a guess. I'll show you the answer below.
In fact today when everything seems to be moving even faster that saying was never truer. It is true for businesses and other organisations from the largest multinationals to SMEs and the self-employed. Today's complexity and the distractions from social media and email make hard to focus on what gives your customers a great experience and so makes money.
Looking at the 2F diagram below you can see waste shown as a separate outcome from an organisation.
OK, so how much waste activity, and hence time, is there in organisations? Well in 2002 the Lean Enterprise Research Centre at Cardiff University published a report in collaboration with the University of Bologna called Lean Profit Potential. In it they published a guide to the proportion of value adding activities compared with non-value adding activities in unimproved organisations. These are summarised in the figure below.
When I first saw this I was astonished! Then I immediately realised the enormous opportunity hidden in any conventional, unimproved organisation. Never mind whether you use Lean methodologies, business process improvement or just use that rare thing commodity, common sense. The most common organisations are what the authors call information environments, which includes offices, distribution or retail. Looking at the chart above almost half of activity is waste. Your challenge is, which half?
All parts of your business or other organisation, whether the value flow or support activities, generate waste. One of the standard performance improvement methodologies, Lean, identifies eight types of waste, that apply whatever sector or industry you work in. Can you see in the list below which ones waste time?
- Transport - unnecessary
- Inventory - stock and work in progress
- Motion - excess body movements
- Waiting - or delays
- Overproduction - excess activity (i.e. too much, too early or over ordering)
- Over processing - unnecessary processing that users don't need
- Defects, mistakes or errors - quality
- Underutilised talent of people - not using their minds, not listening to them and their fear of speaking out
Some are obvious, like Waiting. Mistakes can involve doing work twice, so even in information processing sectors time is lost and possibly customers not served when they need it. When you think about it they all involve time, whilst some also involve waste of materials or money.
Knowing what you know now what are you going to do about? Is the prospect of improved performance both financially and in serving your customers better attractive enough for you to take action? Well is it?
Future blogs will continue to expand on the 2F diagram, drawing from my book Picture Your Business, which is still available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing alanclark@keybiz.com.