When it comes to “waste” in business, we usually 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 not just a concept for manufacturing and in fact is found in service sector as well. At first, it can be a little difficult to identify this waste but apply a few Lean Six Sigma concepts and the results become clear – waste equals increased costs and lower customer satisfaction.
Service processes can be slow, expensive while being prone to poor quality. For example, 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 and it soon becomes major rework to void the transaction and make the correction. Service processes tend to be slow because they are too complex during “work-in-process”. This WIP might be waiting for a database to respond due to lack of computing resources, a document resting on someone’s desk to be processed or emails waiting to be delivered and read on the other side of the world. Any time excess waiting by a customer is present; there is too much work-in-process and no value added to the transaction. It has been found that 80% of delay is caused by less than 20% of the activities. That said 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 can hire a Black belts trained in Lean Six-Sigma to find the waste within your company. But that is expensive and not practical so you may want to create a waste management project of your own. Start by looking for complex processes within your business. If a task takes more than a few steps it may be a candidate for improvement. If the “paper work” is over-whelming and prevents the start of the “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 a customer
- Updating a database with customer information
- Looking up information
- Escalation of an issue
- Reward programs
Your employees are usually aware of steps in their processes that add no value for the customer, so ask them for their feedback. Keep in mind that process change should equal cost reduction and an increase in customer satisfaction scores. Waste doesn’t have to be “just the way things happen” within your company.
Ted Saul is a business coach living in Murrieta Ca. He holds a BA and MBA from Regis University and can be reached at ted@tsaul.com and on LinkedIN.
