If you are a small business owner, you are unlikely to hire
a consultant, or even take courses yourself, to work on a Continuous
Improvement strategy for your business.
Large companies often have Lean Champions, or Six-Sigma teams that are
full-time dedicated to analyzing and enacting measures to make the business
more efficient, more profitable, and of higher quality. For many, it’s a way of life, or a “culture”,
of ongoing improvement. And guess what…
it works.
But in small business, not so much. If you are a business owner, you may be
thinking, “Aw geez, another thing that I’m supposed to do? I can barely keep up with all the hats I’m
already wearing, and you want me to learn about Continuous Improvement?” Well, think about it. Isn’t that like saying “…and you want me to
learn about being more successful?”
Actually… YES!
But I have to admit, the full blown sciences of Continuous
Improvement can be daunting, and unfortunately, there are so many great gurus
that have developed deeply expert material on this topic, that it is
information overload for a small business owner. So here’s my recommendation. Start with the basics. Keep in simple. Read a book, like “The Goal”, by Eliyahu Goldratt.
Take a small amount of time to ask yourself, where could I improve this
operation? Think about the fact that
large companies, like Toyota, who have a deeply ingrained culture of continuous
improvement, are never satisfied that they have reached perfection, and are
always looking for the next way to get better.
One way to start is by trying to identify areas of Waste in
your business. Consider these Seven Common
Business Wastes:
- Overproduction – Making more of an item, or providing more service, than the customer needs right now. Here’s a simple, kind of funny example: How many of you have ordered 1,000 business cards because you got a “deal” on the volume, only to change something (logo, phone, email), thus ordering more cards and throwing away most of the original batch?
- Inventory – Having more materials, parts, or products than is needed right now. It is amazing to me how much “just in case” inventory many of us hoard. This is a waste of cash being tied up in something that may never be needed. In this age of instant everything, could we really not obtain that special item if a customer needed it?
- Waiting – Idle time created when material, info, people, or equipment is not ready. Let’s say you have three employees waiting for a half hour at a job site for materials to be delivered because you failed to arrange for delivery on time. If you pay them $20/hour, you’ve just spent $30 on labor for nothing. How often do you do that?
- Defects – Work that contains errors, rework, or mistakes, or lacks something necessary. How often do you make something that you have to throw away (scrap)? How often do you credit a customer because of inferior product/service? Do you ever order the wrong thing, or does your supplier deliver something other than what you ordered? Yeah, I thought so.
- Motion – Movement of people that does not add value. Here’s a common one… you or a crew member runs to the hardware store because you forgot (or lost) an important tool or part needed to complete a job. You are paying for that trip, and not able to bill your customer for the time it took.
- Transport – Movement of product that does not add value. Instead of having a warehouse location, some items get stashed on the floor because they are often used, or you just don’t know where else to go with them. Every time someone has to move those items to get at something on the shelf, it’s a waste.
- Processing – Effort that adds no value from the customer’s viewpoint. If you have any kind of setup process needed to perform the work, or produce the product needed, it is unlikely you can get paid by the customer to do that. They simply expect you to produce the product. What can you do to speed up or eliminate setup?
These examples may or may not apply to you, but hopefully
you get the idea. What wastes can you
and your team identify in your business?
When you begin looking at your business in this light, you will be
amazed at the improvement you can make.
