When it comes to “waste” in business, we tend to think of the manufacturing environment with factors such as the incorrect ordering of raw materials, improper production or mistakes made during work in process. But waste is found elsewhere including the service sector. Applying a few Lean Six Sigma concepts such as identifying Work in Progress increased costs and lowered customer satisfaction will be evident.
Service processes can be slow, expensive while being prone to poor quality. Have you ever been checking out at a retail store and watched as the cashier presses a symphony of keys on their register to finalize your sale? The many steps often cause an input error becoming major rework to void the transaction and start over. Service processes that are slow tend to be slow if too complex. Work in progress might be waiting for a database to respond, a document waiting to be processed on someone’s desk or emails waiting to be read on the other side of the world. Any excess waiting by a customer indicates a sign of Work In Progress and no value added to the transaction. It has been found that 80% of delay is caused by less than 20% of the activities. A business only needs to find and improve 20% of their process steps to see an 80% reduction in cycle time.
So, what can you do? You could hire a Black belt trained in Lean Six-Sigma to find the waste within your company. But that’s expensive and not practical so you may want to create your own waste management project. Start by looking at complex processes. If a task takes more than a few steps it may be a candidate for improvement. If the paperwork is over-whelming and prevents the start of “real” work then your work-in-process queue may be too long. Following is a list where you might want to begin your hunt for waste.
- Point of sale
- Return and credit processing
- Quotes and estimates
- Warranty processing
- Delivering of a product or service
- Validating and updating a customer record
Employees are usually aware of wasteful steps so ask them for feedback. Keep in mind that process change should equal cost reduction while increasing customer satisfaction. With today’s supply chain challenges, it’s even more important to prevent waste both in product and supply inventory.
Ted Saul is a business coach and writer that assists with Business Plans, Project Management and Career Management. He earned his MBA from Regis University along with a Master’s in project management. Ted can be reached on LinkedIn or by emailing TedSaulbiz@gmail.com.