Years ago when I was in my mid-twenties I started to notice my vision wasn’t quite what it used to be. You can probably relate if you wear corrective lenses in the fact that it takes some time before you realize you need to do something about it, especially if you’re a man! It was a slow fade from having to squint to see street signs; slowly progressing to not being able to see them at all.
When I finally admitted I needed to do something about it and had my first eye exam in years, the doctor confirmed I was in need of corrective lenses. When I first put on my glasses it was an eye opening, no pun intended, experience. I felt a little uneasy at first, but what happened was a whole new world opened up to me. What I had not been able to see for years was now perfectly clear.
I often use this analogy to explain what it is like to work in an environment every day that has opportunity all around, yet remains unseen to most of the people working within it. What is needed can be similar to getting an eye exam and corrective lenses to see what cannot be seen.
The various forms of waste within the lean perspective is similar to my analogy of needing glasses in that without the “lean lens” we cannot see the waste all around us. The lens I prefer to use is the DOWNTIME acronym describing the 8 classic forms of waste.
Defects and rework.
This type of waste is the most easy to spot, but it still amazes me how we can overlook it. Rework is especially easy to become complacent with. How many times have you heard someone say something to the effect, “I always have to fix this problem”, or “it’s quicker for me to just fix the problem myself than do something about it”.
Overproduction can be hard to identify in some cases because we generally believe the more I do in the time I have the greater my productivity becomes. This type of waste can be attributed to old school thinking around efficiency, which is generally calculated as output / time period. If we can increase the work and / or decrease the time it is perceived to be a good thing when all you are looking at is cost / output.
Another classic form of waste is waiting, which can also be hard to see if you are not looking for it. Waiting causes problems from two perspective. First, customers who wait are not likely to return if they have options of finding similarly priced products and / or services at the same quality levels elsewhere. Second, waiting means an increased duration between cash going out of a business to pay for costs associated with a product and / or service and cash coming back in from customers paying.
Not using people well.
This is perhaps one of the most devastating forms of waste, and also one of the most difficult to see. I read a story about Jack Welch the former CEO and Chairman of GE who was on one of his final plant tours before retiring where he would go around the country meeting with associates at the various locations GE operates from, and during one of those trips met a guy who had been with the company for more than 30 years who told him, “All this time you’ve paid me for my hands when you could have had my brain for free!” Talk about not using people well!
We often think of just moving product around when it comes to transportation waste, but this can also include things one cannot see such as data. Sometimes transportation can be value-added (i.e. UPS, FedEx) when we are willing to pay for it, but in most cases moving stuff around is not something customers value.
Inventory is a silent, but deadly killer of many businesses. I once worked with a company that was struggling to make payroll, but was sitting on top of $2+ million in inventory that was tied to no customer orders! Unfortunately, in most cases inventory is looked upon as an asset and not a liability (i.e. balance sheet), but in reality it’s cash that has been spent for stuff that has not yet been converted into revenue and profit, and worse case, as in my example, has been purchased in the hopes of getting future orders! If you check into the reasons why most small businesses (<500 employees) fail it’s not because they hire the wrong people or have too many defects, it’s because they run out of cash.
Taking a few extra steps here and there can add up to higher safety risks and less efficient processes. Both can lead to greater cycle time in meeting customer demand, and again a longer cash out to cash in cycle.
Excess processing is probably one of the most misunderstood types of waste. I often use the term “gold plating” to help others understand what excess processing is. This type of waste is going way above and beyond what the customer has asked for, which intuitively wouldn’t seem like a bad thing at first. For example, I used to go to a Starbucks near my house that has a drive through and would order my usual grande (medium) black eye, and just about every other day they would instead give me a venti (large). Now Starbucks isn’t going to go broke giving me a few more ounces of coffee each day, but if they did this for a large percentage of their customers it would have a negative impact on profitability.
The point is to be operating “lean” we need to give the customer (both internal and external) what they want with minimal DOWNTIME, and deliver at a rate they want, meeting the quality level they deem acceptable-nothing more, nothing less.
Put your DOWNTIME glasses on!
The challenge you now have before you is to take the first step in correcting your “lean vision”, and to do so all that is required is putting on a pair of DOWNTIME glasses. This is often the first step I prescribe to clients who want to get some hands-on use of the lean tools to create some excitement in a company looking to get leaner.
All that is needed is a quick overview of the different types of waste to help correct the vision of those working in the environment you want to analyze. With their vision “corrected” they will begin to see the opportunity (DOWNTIME) to improve.
To get started feel free to use the linked template below that has some helpful tools to find the waste. I’ve also linked a short slide deck explaining each of the waste types to help others see what has been all around them in many cases for years.