Tackle These 7 Wastes to Cut Costs & Improve Efficiencies

Posted by Khris Bhattan on September 19, 2018
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Removing waste from any business process should be a top priority. Want to reduce cost, save time and improve efficiency in your business? Reduce and remove these 7 wastes. This may seem simple at first, but there is a proven approach to identify and remove specific types of waste from any business processes.

The 7 Wastes was first identified by Taiichi Ohno, the father of the Toyota Production System. He applied the methodology of eliminating waste from the Toyota Motor Company business model in every element of their business. Those who embrace Lean methodologies and practices strive to improve efficiencies by consistently reviewing the 7 Wastes.

At RTG Solutions Group, through the 7 Wastes approach, we remove wasteful operations from businesses in a variety of industries including manufacturing operations, healthcare and retail organizations.

Where is waste in businesses?

In Manufacturing, wasteful operations are readily found in manufacturing processes and support functions. Manufacturing operations must continually evolve in an environment of continuous change of designs, product lines and customer demands. Reducing wasteful operations can assist in increasing the quality of the product and aid in reducing production costs. Due to the high variability in a manufacturing environment, there is always opportunities to reduce or eliminate wasteful operations.

In the Healthcare industry, elimination of waste is paramount to the critical nature of the work – healing people and saving lives. In an urgent environment, there is little room for error and time is critical. One way to remove waste in healthcare operations is to decrease the amount of time required for tests and procedures to maximize patient care and their pain management.

In the Retail industry, eliminating waste has direct impact on the ability to generate revenue. Waste is evident along the entire retail process, in both brick-and-mortar stores and eCommerce experiences. This encompasses when a customer first steps foot inside a retail environment, like a furniture store or car dealership, to the close of a transaction and delivery of the product. All along that customer experience and sales process continuum, are opportunities to reduce waste. As a result, the retail business saves time and money, increases revenue and enhances the customer’s experience for future sales opportunities.

RTG Solutions Group identifies the 7 wastes as:

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  1. Overproduction
  2. Defects
  3. Inventory
  4. Over Processing
  5. Motion
  6. Transport
  7. Wait Time

You will find different icons and images that portray the 7 Wastes, and in various orders. We have purposefully prioritized the 7 Wastes based on business impact and ease of implementing solutions.

The order of the wastes is ranked by magnitude, difficulty and impact on the organization. Without a doubt, Overproduction is the number one “offender” of waste in any business environment.

To start attacking wastes in your business, start from the bottom of the list. Some of the easiest time and cost savings can be obtained from the lower portion of the list: Wait Time, Transport, Motion and Over Processing.

In any environment, from manufacturing to an office setting, these four wastes can be uncovered and eradicated from the work area. This will result in streamlined operations and immediate benefit to the business.

No. 7: Wait Time is easily solved by either increasing the speed of the previous process or by re-allocating the resource that is in a holding pattern. When working in a virtual environment, the software of choice more than likely has controls that can be activated to assist in decreasing wait time.

No. 6: Transport is solved for by reducing the amount of distance between one process to another either. This includes both in a virtual environment or in actual physical distance.

No. 5: Motion is reduced by creating ergonomic work environments and tools that reduce the need for excessive motion. This is typically thought to be primarily for manufacturing or production environments. However, something as simple as an office printer is often significant distance from those who use it.

No. 4: Over Processing is solved by standardizing the amount of time it takes for work to be completed. Standardizing the work of individual contributors is the easiest way to maximize their time and reduce the ambiguity around their responsibilities.

The highlighted “bottom 4 wastes” are easier to solve for than the “top 3 wastes” and require minimal tools and resources. It’s important to have a good understanding of the existing processes and how the team is currently working. It is beneficial to have strong leadership with the ability to engage the team in all efforts to reduce and eliminate waste.

The “top 3 wastes” require a deeper understanding of the problem statement and expectations in solving the problems to reduce the waste.

No. 3: Inventory issues require additional investigating and data mining. What is the functionality of your inventory management software? The review of current software and evaluating other inventory management tools is critical. There are many facets to inventory control. And there are just as many tools available to solve inventory problems. The difficulty lies in which tool or resource is in best alignment with your business structure. The inventory resource or tool should have the ability to efficiently support and sustain the product or service your business is providing.

No. 2: Defects created during the thousands of business processes in day-to-day activity in an organization requires an objective investigative approach. The review is typically led by the Quality Department. The assessment includes: defect analysis, root causes, and corrective action plans specifically geared to understand why the defects occurred. Additional resources may be required to determine root causes of defects and the next steps for prevention of defects in the future. Some outcomes may include: design changes, process changes, audit infrastructure, remedial training or third-party outsourcing.

No. 1: Overproduction is the most difficult waste to reduce or eliminate. In a way, it’s human nature to want to produce more. Producing moreof anything is always better, right? Well, not exactly.

Producing a product or providing a service takes discipline and critical thinking. It requires a choregraphed production of schedule and cadence. This is a dynamic and cultural shift in methodology and approach to doing business. Producing at a rate in direct demand of what the customer wants is diametrically opposed to everything that has been traditionally taught as a best practice. We have all, at some point in our careers, been conditioned to think that more is always better. This is not always true when manufacturing a product or providing a service.

Overproducing, resulting in excess product or services that are not reflective on the bottom line revenue, is a major contributor to costly business expenses. Excessive overhead costs, as well as cost of excess inventory, are some of these contributors.

There are differences in office and manufacturing environments. However, the Overproducing concepts are very similar in both scenarios. The difficult part is a creative approach. Eliminating wasteful operations requires you to teach and utilize the concepts in a manner that is easily adopted and repeatable. It’s important to know your audience and “feel the pulse” of the team to gain credibility to make impactful strides towards better business processes and waste reduction.

To tackle waste in your business, listen and understand the current state of the business operations. Single out the waste and ensure alignment with each of the 7 Wastes outlined here. Solicit feedback from the team as to how to improve and streamline your internal business processes. Facilitate the change in a manner that is inclusive. Document all process steps to create a record of what was done. This step develops a standard that can be measured against. Celebrate team successes when the implementation is complete.

Follow these steps and start experiencing the benefits of identifying and eliminating wastes in your business!

Is your organization trying to improve business processes, foster an environment of continuous improvement and improve employee engagement? RTG Solutions Group can help! Give us a call at (813) 943-5727 or contact us here.

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