Optimize Your Business Without Spending a Dime

We all want to make improvements to optimize within our business, small and big. We may know where we want to end up, but the journey there can seem expensive or even intimidating.

Speed is everything in today’s business environment. The path of least resistance has always been attractive to humans but can often cause mistakes and setbacks. To get the job done right, we have to be willing to put in the time and focus.

Speaking of time, we can all agree it’s the most important resource in today’s business environment. We all want faster, optimized solutions that save us time, but to get there you have to invest the time.

So, knowing that in order to save time, we must spend time, where do you focus when getting started with optimizing and improving – without wasting time?

Implementing lean concepts that can get you there.

Lean Practices

You may have heard this industry buzzword before. The core idea behind lean is to maximize value while minimizing waste – creating more value with fewer resources.

Lean practices are focused around keeping costs, cycle times, and work in process low, while at the same time maximizing workloads and utilization levels. The goal is to stretch dollars as far as they can go while still reaping the maximum benefits and keeping quality levels consistent.

The intent of adopting lean practices is to reduce waste, so we can have our people focus on more worthy (or lucrative) tasks. Lean doesn’t mean getting rid of people – it means getting more from people, shifting their focus and workload to more worthy (or lucrative) tasks.

Before implementing any lean practices, it’s important to identify the area(s) you believe are most important to improve. Keep it simple here by identifying one area you feel you’re producing a lot of waste.

Here are seven wastes we encounter on a regular basis:

1. Overproduction – Are you making too many products or creating too much paperwork? If you have an issue here, it’s going to adversely affect transportation, movement and inventory later!
2. Transportation – Are you moving equipment, people or product around regularly to make room for other things? Are your warehouses, suppliers/vendors, showrooms or distribution centers spread far apart? Have you determined the best delivery routes from points A, B, C, etc..?
3. Waiting – Do you have employees waiting for things to do?
4. Movement – How much time do you spend moving things around in your shop, warehouse or workspace? Does fulfilling an order require a lot of physical movement to fulfill?
5. Inventory – Do you have orders sitting in inboxes waiting to be processed?
6. Defects – Do you have errors in product designs, order intake processes? Are you noticing a lot of rework?
7. NVA (non-value-added processing) – Are you re-entering data or have unused data fields in your system? 

So how can you really sniff-out these issues?

First, look for any part of your operation or business where employees aren’t clear on a process or procedure. Without a doubt, if they don’t properly understand why things are being done or how they should be done, higher levels of waste will be generated.

When it comes time to implementing standard lean practices, being organized is crucial, and should be your first step. Being organized can save you BIG money.

To illustrate how being unorganized can cost you, let’s consider the following scenario:

Say employee Joe Shmoe’s time is worth $100K per year. That isn’t how much he is being paid, rather, it’s the portion of revenue he is responsible for or potentially a level of value he provides and generates over the course of a year. Now let’s say Joe’s hourly rate is $50/hr. If on average Joe spends five hours per week on wasted activities that are deemed essential, that’s $250 spent on “wasted time” per week. That’s $13,000 per year. If Joe’s company has 100 employees with similar waste activities, the cost would balloon to $1.3M per year in wasted time! Now image what Joe and all of his coworkers could accomplish with that 5 hours per week of extra time. That’s the cost of being unorganized, and according to a study by Salary.com, it’s quite common. Time is money after all!  

Now, how do we fix it? Let’s talk about some lean organization tools that can help.

1.  5S’s of Lean

In the spirit of staying organized, 5S is our trusted friend. 5S stands for Sort, Straighten, Shine, Standardize and Sustain.

We all know the saying, “everything has its place.” 5S is the practice of having everything organized and easy to find to reduce the time it takes to complete a task.

This concept not only applies to where you put your stapler on your desk, or where to put a forklift in your shop, but also your digital workspace.

Let’s put the 5S’s into action:

Sort-out what’s important (what you reference on a regular basis), organize (straighten) it, keep the space or tools clean (shine), make it a standard to keep it that way and find the time to sustain it!

This might seem overwhelming depending on what your workspace looks like, so it’s important to break this into small chunks. That’s the secret, start small. Don’t try to 5S an entire warehouse until you’ve mastered your desk or workspace first. Once you make it a habit and get into the rhythm, you’ll be ready to move on.

We get what we tolerate, so set a higher standard and commit to staying organized.

2. Value Stream Mapping

Break out the white board or sticky notes for this one!

Value Stream Mapping is also known as material and information flow mapping. This practice will help analyze and build an understanding of your current state, and will help discover what is leading to the waste.

Value Stream Mapping involves asking the right questions and researching how a process works or how flows of material and information move through the process chain. In the process, you’re looking for what’s causing the waste and narrowing down the variability in the process (what can go wrong and how likely is that to happen?).

To start, walk through one of your processes step-by-step, writing down the time it takes to move through each step – branching off to subcategories as well. Once you can see the process fully illustrated, you can see how complicated, or not, it is and look for the areas that take the most time to complete or where there is enigmatic feedback (the process isn’t clear).

Some things to ask along the way:

• What is the process time for each step? This includes setup time or rework time (if there is any).
• How many people are involved at each step?
• Is each step needed right away (what’s the demand/Takt time) or can something wait or be removed altogether?

Once you have illustrated your process flow, identify the items that take a long time to complete or do not have a clear execution path, you should have a better idea of what you need to improve to reduce waste within the process flow. The goal is to look for non-value-added items that can be removed.

Conclusion

The concept of lean is a river than can run deep; however, there is a lot you can do without any formal or expensive training sessions to get better, and these tips are a great starting place.

Lean processes are aimed at increasing organization and process flow. They also promote higher levels of standardization. When you increase standardization, you remove the possibility for variance in the process. It’s easier to train incoming employees and promote innovation within the organization. Lastly, and arguably most important, is reducing uncertainty. In general, uncertainty can be crippling to individuals and counter-productive in the workplace.

By instilling well-organized and standardized systems, you’ll produce a far more stable work environment that will increase profits for many years to come.