The 5 Deadly Sources of Waste in Services

Counting defective parts may be an easy way to measure waste in the manufacturing industry. But when it comes to services, the continuous improvement practitioner often encounters two challenges. Firstly, it is hard to define waste in certain processes. For example, what is waste in the eyes of an anxious fan waiting for the show to begin? What is waste in the eyes of a patient waiting to see a doctor? Secondly, once waste has been identified, what is the metric that truly portraits such a waste? Let's consider the following 5 deadly sources of waste commonly found in the services industry but not often dealt with properly. Are these sources of waste leading your organization to customer dissatisfaction, product returns, and loss of brand reputation?

1. Waiting: on the phone, in line, for the product to arrive, for the supervisor to approve, for the flight to board. In today's fast pace environment, waiting not only causes financial loss to both customers and organizations but also creates anxiety, frustration, and stress upon your stakeholders.

2. Searching: for the right file, for that piece of information, for the parking lot, for the expired contract. Searching, in most cases, can be a product of lack of training and/or lack of workplace organization. Searching files and spending hours on the phone with the customer may be the result of a poorly managed and disorganized work environment (hint: 5S program).

3. Bad Customer Service: have you ever considered the number of customers that you may have lost due to the fact that your front line employees are just grumpy? Has your organization reimbursed customers because your office personnel did not communicate effectively with the employee assigned for the job?

4. Redundancy: reworking the same Excel spreadsheet over and over again, contacting the customer multiple times to discuss the same problem and offer the same solution, collecting 7 approvals for a low budgeted item. We all cost extra money (to the organization and ourselves) when the work has to be done twice (or three, four times).

5. Meetings: How many are really necessary? How many truly produces an outcome that is value-added to the organization? How much money is your organization spending on GoToMeetings, Webex, and muffins? Lean organizations should start to let go of the rituals set 25 years ago.

These sources of waste can add up quickly to your processes and may be hindering employee morale, service quality, and brand reputation. Whilst it's easier to identify and measure tangible wastes, it is important that Lean organizations be aware of potential sources of hidden wastes. 

eZsigma Group is Canada's leader in Lean Six Sigma. We offer a vast array of services that will help your organization to achieve a new level of excellence. Please contact us for further information about our programs.

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.

Force Field Analysis in 3 Steps

Making a decision about a major undertaking such as the implementation of a Six Sigma program is not an insignificant task. As we all know, the on-boarding of a process excellence initiative may affect the lives of many employees not to mention the possible change in various processes within the organization. The Force Field Analysis was developed in the 40's by Kurt Lewin (a social psychologist). It is a practical and useful tool that you can use to help your organization in the decision-making process of any major change brought by new initiatives. This simple and yet powerful quality tool can provide the practitioner with a visual assessment of the forces that are against or in favour of the initiative being implemented. It also gives the quality professional a pictorial representation of the factors that need to be minimized (restraining forces) and the ones that can be used as leverage (driving forces).

How to Build a Force Field Analysis Diagram in 3 Steps

Step 1. Start by stating in the middle of a flip chart or a sheet of paper what it is that the organization (or department) is about to embark on. This can be a simple Kaizen rapid improvement event or a year-long Lean Six Sigma on-boarding program.

Step 2. On the left side of the central statement, list all factors that may contribute to roadblocks, issues, or even failure in the initiative. The Force Field Analysis diagram should be built through a brainstorming session which it means that, all ideas and insights are welcomed at this point. For a Six Sigma implementation approach, restraining forces could be employees' resistance, cost of remodeling a new process, and lack of inside expertise to name a few.

Step 3. On the right side of the central topic being studied, list all factors that may contribute to the success of the initiative. These include, but are not limited, to savings in time and cost, higher customer retention rate, improved product quality, fewer recall events, and industry recognition in process excellence. As in item 2 above, all ideas related to the success of the central initiative are welcomed at this point.

Some authors suggest the inclusion of a weighing system applied to these forces. For example, are there restraining forces that affect the program being implemented more than others? A simple scale from 1 to 5 (weak to strong) can be used. Once the diagram has been completed, the organization should start working on the minimization (or elimination) of the various restraining forces and on the strengthening of the driving forces. The Force Field Analysis will ultimately provide the user with even a decision on whether or not to go ahead with the program/change/initiative. On one hand, you may find that there are just too many restraining forces to tackle. On the other hand, you may find that the program being considered can be implemented with a great deal of driving forces that will make the entire process a lot easier than expected. One way or the other, the tool can be used to help you in making a better decision.

eZsigma Group is Canada's leader in process excellence. Through the deployment of Lean, Six Sigma, and Strategic Management consulting and education, we have helped hundreds of businesses to improve their processes and be a better organization. Contact us should you have any questions on how we can help your organization to be a better one.  

3 Steps for a Successful 5S Program

Seiri, Seiton, Seiso, Seiketsu, and Shitsuke. The 5S program is not new. It has been around for at least 30 years, and it has helped organizations of all sizes in developing a better and safer workplace for employees of any industry. But 5S cannot be just another flavour of the month. The easiest steps of the program (the first 3 Ss) are a lot of fun to execute. They have a visual appeal and instantly deliver change in the workplace. Indeed, the hardest part is the organization's mind changing that will set the workplace ready for the program's longevity. In this post, we offer our audience three steps to make your 5S program last. To learn more about 5S, please visit the links provided below. You can also find dozens of books written about 5S for sale.

1. Establishing ownership: an orphan 5S program is nothing else than political compliance or simply stated, waste of time and money. Large corporations usually pick "champions" or "owners" to be the sponsors of the program, from training to execution. Small- and mid-size companies usually have their owners as the main sponsor. Whoever the organization chooses to be in charge, it is vital that someone is in fact in charge. It is equally important that this someone truly believes that the program will make the organization a safer, more productive, and better workplace - the old "walk the talk" adage.

2. Education: we have seen, in many occasions, a 5S program going down the drain because of lack of education. And we really mean education, not training. Employees need to comprehend why the program is about to be in place, and how the program will change their lives at work. Often, 5S is delivered as a housekeeping program, and a housekeeping program 5S is not. The main idea is to improve the well being of all, not only employees but also customers, vendors, and even the community around your business. The program per se includes housekeeping, but it is far from being it only.

3. Allocating a budget (or not): have no fear, in most cases, a low 5S budget can still make a huge change in the workplace. Furthermore, if the organization simply wants to contract third parties to rebuild, repaint, or even manage the program, it will not achieve the main idea of ownership and commitment from employees. The best 5S programs we have seen did not require a lot of capital or external contracting to be successful. Employees in most cases, when committed, use their intelligence and creativity rather than the company's funds. Of course, inevitably there will always be those cases in which spending is mandatory, but any company can start the program with zero cash for it.

A well implemented 5S program depends on many variables. These are only a few of them, but if the entrepreneur has these simple 3 steps in mind, s/he is off to a great start. If your organization does not have a 5S educated person, and if it is difficult to educate someone onsite, eZSigma can help you to turn your organization into a pleasant and productive workplace.

Selected links:

http://asq.org/learn-about-quality/lean/overview/five-s-tutorial.html

http://en.wikipedia.org/wiki/5S_(methodology)