In these truly strange times, many of you will find yourself in a position you’ve never been in before. We want to help you use this time wisely, so you bounce back better and more profitable than before.
The main message is you are not alone, and we are here to help.
You might have already seen our recent video on reducing the 7 wastes in your business. If not, you can view it here: https://youtu.be/E-gRo1Dm7nw It explains the areas where your business could be wasting time, resources and most importantly money.
Identifying Waste:
It would be useful to know how to identify these wastes so you can categorise them, reduce or eliminate them.
A lot of people assume that to save money they must cut costs and start looking through direct debits and bank transactions. That is only half the process.
There are probably costs you overlook as a must. Take salaries for example. Whilst you pay a salary to someone rather than thinking the obvious way to cut that cost is redundancy, you should start looking at how you can minimise the waste from that cost.
There will in every business be idle time from your team, whether its coffee or toilet breaks, talking about yesterday’s X Factor or whatever else – the real saving will be from reducing this or increasing the productivity levels.
All processes in your business either add “Value” or add “Waste”. It is that simple.
To identify wastes, you should audit processes in your business to see if they are a waste adder or value adder and be strict with yourself. The phrase “but it has always been done like that” is not a valid reason for doing it. Trust me, I have had this conversation a lot of times and eventually save clients a lot of time and money.
The Process:
To audit a process, you need to know what the desired result is. You can create a plan for each process or step by using the Now, Where How method. Here’s an example of using this method. There is more content on this too if you want to see it in action.
Now – It takes 3 hours to manufacture a desk from the raw materials. The steps we take are:
Locate material in warehouse row A for the top, row T for the legs, row Z for the screws and row B for the plastic bits that go around the telephone holes, taking each one to the assembly room individually – in that order.
Mark on the system that the selected items have been removed.
It takes 1.5 hours to assemble all parts with a drill usually rounding the screw head on 20% of the screws.
We remove the plastic bits and put them in a separate bag for transportation to ensure they don’t get lost when being shipped along with spare screws.
Once packaged, the desk will stay in the assembly room (taking up space) until the delivery note is printed.
Delivery note signed for and passed to the accounts department to raise the invoice in word and post to customer.
Where do we want to be? We want to increase production by 50% but the warehouse size and team resource is at capacity. This means we need to save 1 hour per desk.
This brings us to the How. The things we are going to change to make this possible are:
Ensure the picking list is received first so the locations can be in an order from A-Z along with the delivery note for the customers finished goods that will be shipped (saving 20 minutes on picking and 15 minutes on collecting the delivery note and idle time for the manufacturer).
Use a trolley to gather all parts at the same time (saving a further 10 minutes).
Buy better quality screws or different style heads – cost 10% more but saves 20% in wasted items.
Finally, the 15 minutes that the desk spent in the assembly room holding production up for the next desk while you collected the delivery note has also been removed as you have this already and can move the desk to the loading bay (another 15 minutes of increased production).
Hopefully you can see by having a clear outcome you can start auditing the process and identifying where waste is added.
Talk to us to help you identify waste in your business to improve your profits.