With our economy still lagging in the Midwest and many small business owners asking "When will customers start buying again?", if a business owner wants to increase profit without raising prices while keeping existing customers, it is time to invite Tim Wood to the party.
Before we go any further, as a student and teacher of Lean for over 10 years, I know the Seven Muda - 7 Wastes. My son, Carl, who is a Research Scientist at Owens-Illinois told me about TIMWOOD, the mnemonic for remembering these 7 wastes - someone was clever.
Transportation - Any unnecessary movement of material, documents, or people.
Think multiple trips = wasted time = wasted transportation.
Inventory - Work in process, incomplete work and work no longer in demand by customers are all suspect. Years ago an HVAC business owner showed me a storage garage filled with furnaces purchased on discount volume. The inventory value of these 2 year old furnaces equaled a Rolls Royce! I'd rather have a Rolls in the my garage.
Motion - Are you switching between computers, moving people around the office for different tasks? What movements in your office aren't adding value that customers care about?
Waiting - Queues, bottlenecks and traffic jams are all signs of waiting. Knowing where and WHY a bottleneck occurs is the first step, changing habits and patterns to ease customers' waiting or eliminating wait is second. And what about those employees standing around talking amongst themselves. . .what are they waiting for?
Over-processing - Is adding more value than the customer requested or expects. Examples are:
1) Sending a paper copy of document emailed via PDF.
2) Music CD packaging.
3) Mail order blue jeans with packing peanuts.
Where is the value? Do they have cost?
Over-production - Production of product or service before demand. Auto manufacturers are famous for Labor Day Sales to move old inventory before new models arrive. In offices, printing forms before the customer needs often leads to waste when forms are revised.
Defects - Mistakes, errors, or products/services that don't conform to the customers' expectations. Yes, mistakes will happen and they should always be a learning opportunity. Too many mistakes will almost surely lead to too few customers.
If you believe you have NO waste, before you start the celebration do two things.
1. Call a dozen past customers.
2. Examine what is in your dumpster.
You may be surprised! Take a walk around your business and look for Timmy hiding in the corners.
Linda Lucas Fayerweather EA, MBA
Owner of Changing Lanes LLC a productivity coaching firm since 1998
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