Office Kaizen, Part 4/4 (Asset Wastes)

In this last post of our Office Kaizen series, we address asset wastes, which represent the less than optimal utilization of material and property of an organization. When assets are not utilized in their most efficient manner (buildings, vehicles, parts, and products to name a few) these resources are wasted, leading to the creation of non-value added components to the process occurs. Lareau (2003) describes four types of asset wastes:

Inventory Waste: a very common issue in any push system, idling material waiting to be used creates waste in the process. The same goes for final product inventory waiting to be shipped to the customer. One of the main concepts behind the Toyota Production System (TPS)  - which made Lean Manufacturing very popular in North America, is the optimization of a pull system in which materials are moved through the value stream only when necessary. This in turn, helps the process in not building unnecessary inventory. As clearly implied in the preceding sentences, a pull system, along with metrics that trigger the steps within a value chain, is the best path to an Office Kaizen inventory management approach.

Work-in-Process Waste: often referred to as WIP, work-in-process waste is the type of waste that is generated by resources spent on mid-processes that cannot yet be fully used in the next activity of the value stream. If WIP involves the waiting of steps in the process itself, and if it is an necessary evil in the process, then the human resources that are also waiting in line should be utilized somewhere else. Metrics can be put in place to indicate (upfront) the possible idling of activities by WIP. Workers could then plan ahead and be better utilized in another step of the chain. From a materials perspective, as in Inventory Waste, a pull system can also help in less WIP if the process itself has room for improvement (and usually they all do!).

Fixed Asset Waste: the warehouse, the equipment, and the buildings that are not being maximally used represent this type of waste. In many industries, the normal approach to expansion is to lease or buy more, but in an Office Kaizen environment the first thing we should be concerned about is layout, organization (5S), and ergonomics. Only after the company has explored such alternatives more space should be considered. Remember that fixed assets also suffer depreciation - although not a out-of-pocket expense, it reduces the value of the asset and the customer does not pay for it necessarily.

Moving Things Waste: this type of waste includes "all transport of materials and information, except that used to deliver products and services directly to customers." (Lareau, 2003, p. 37). In an Office Kaizen environment, the team would look into the value stream maps of the most critical processes with the aim of reducing unnecessary transport within these processes. Creation of work cells and change in layout may help with the extra steps that add no value to the final customer.

We conclude this series of 4 posts on Office Kaizen by reinforcing the idea of waste reduction in any organizational setting. Waste is present in any process and there is always room for improvement. With the right tools and the right approach, you can make your organization a better one - an organization that is lean in its operational processes and rich in continuous improvement efforts that ultimately benefit the organization, its employees, its customers and basically all other stockholders related to your product or service. We are here to help in case you need a helping hand!

Reference: Lareau, W. (2003). Transforming Office Operations Into A Strategic Competitive Advantage. Milwaukee, USA: ASQ Quality Press.