Businesses of all sizes and industries produce waste, a devastating consequence that has serious implications in the workplace and on our natural world. Many of the environmental challenges we face today can be traced back to wastefulness, and business owners now have to focus on reducing their carbon footprint by operating leaner.
Waste is also problematic for businesses because it takes time to make improvements through employee training, policies and investments. Wasted materials and time cut into the bottom line for any business, and identifying the major causes of business waste is the first place to start solving the problem.
Lean practices help businesses remove waste from production processes, and if you eliminate waste in your processes, you can increase output, reduce downtime and gain more time to perform other value-added tasks for your customers. Here are eight types of wastes a small business can explore to ensure a leaner and cleaner operation.
- Missing or having incorrect information (defects). Consistent data is an important tool to help your business stay productive and organized. As an example, when an invoice is missing critical or contains incorrect information, that error can lead to an incomplete work order that potentially creates more delays and cost money.
- Making more than is needed (overproduction). Sometimes, businesses overestimate how much product is needed to meet demand. Making more than is immediately required by the customer is overproduction. Producing more than is needed can lead to higher storage costs as well as wasted time and payroll for employees managing the products.
- When you do not have the right parts (waiting). Not having the right parts or instructions needed to complete the task at hand is called waiting. In the office, waiting waste can include waiting for others to respond to an email, having files waiting for review, ineffective meetings and waiting for the computer to load a program.
- Using more than is needed (non-standard processing). Using more than is needed to complete the task or everyone on the team useing different steps to complete the same task is called non-standard processing. Non-standard processing can include generating more detailed reports than needed, having unnecessary steps in the purchasing process, requiring unnecessary signatures on a document, double entry of data, requiring more forms than needed and having an extra step in a workflow.
- Moving more people, products or information than is necessary (transportation). The moving of people, products and information is called transportation and anything that must move more than is absolutely necessary is considered waste. Excessive movement of materials can lead to product damage and defects. Additionally, excessive movement of people and equipment can lead to unnecessary work, greater wear and tear, and exhaustion.
- Not matching the right skills to the job (intellect). Underutilizing team members by not matching their skillsets with the task needed and without adequate training is intellect waste. In the office, non-utilized talent could include insufficient training, poor incentives, not asking for employee feedback and placing employees in positions below their skills and qualifications. This can lead to errors, burnout and many more issues for the business.
- Unnecessary or excessive repeated tasks (motion). Excess bending and turning when repeatedly using materials or equipment for the job is referred to as motion. Some countermeasures for motion include making sure the workspace is well organized, placing equipment near the production location, and putting materials at an ergonomic position to reduce stretching and straining.
- Storing documentation or products before they are need (inventory). Storing materials or documentation before they are needed is called excess inventory. Oftentimes it is difficult to think about excess inventory as waste. In accounting, inventory is seen as an asset and oftentimes suppliers give a discount for bulk purchases. Inventory can take many forms, like physical inventory of materials, excess emails in your inbox, backlogged invoices or sales calls waiting to be answered.
As a small-business owner, challenge yourself to find and eliminate waste in your processes. Do a waste audit with your team and ask them to help you identify ways to improve. The first step to becoming a leaner business is to recognize where waste exists and address them early. Implementing leaner strategies helps your workers be more productive, feel more confident in problem-solving, and will improve the bottom line of your business.
EDGAR RAFAEL OLIVO is a bilingual business educator, economic advisor and contributor for several media outlets. He’s a nonprofit executive who is passionate about education. He is certified in finance and data analytics and holds a business degree from Arizona State University.
Para la versión en español de este artículo, haga clic aquí.
