Updated: Feb 24
Regardless of the size of your business, reducing wasted resources is critical to your bottom line.
What is waste? Some say waste is any aspect of business that does not bring value. In contrast, others break it down into more tangible factors, such as delays in processing, duplication, unnecessary movement, defects, poor communication, downtime, lost opportunity, and high employee turnover.
The concept of waste has been a part of big business for many years. Waste was so impactful to its bottom line, a set of techniques and tools for improvement called Six Sigma was introduced in 1980. Since then, the same principals have been used to improve results in businesses of all industries, big and small.
According to the World Bank Group 2020 report, the cost of doing business has increased an average of 36% in the last decade. When you factor in the increase of minimum wage and its impact on all compensation levels, there are no dollars to waste.
Here are five steps to reducing waste and improving your bottom line:
• Define. Define & align each system in your operation with your company goals. Define each role in your system to the smallest detail. Define every task within that role, including the best persona, to execute the job to its optimum level.
• Measure. Set measures and standards within each task by which you will judge your process and system. Create and maintain policies and checklists, including written manuals, to maintain your standards and track your progress.
• Analyze. Analyze your operation against the defined roles and measures you have established. Create a training and development plan for each process to help improve your standards over time. Regular communication and performance reviews are crucial to process improvement.
• Improve. Small challenges can become big problems. Often if a process, product, or system doesn’t work as we assumed it would, we throw away the baby with the bathwater. The fact is, if we have done the previous steps correctly, most systems only need to be adjusted or perhaps given more time to gather accurate data. Look for improvement in small steps and be patient. You may find you do not need to scrub the entire process saving you time & money.
• Control. Once your system is established, you must continually monitor your results. As your business grows and changes, you may need to edit your process to maintain your standard of excellence.
Note, if your business is growing, but your systems and methods are not, your ability to be agile is the key to your success and your bottom line.
Do you want to learn more about strategies that can improve your business results? Please email me at firstname.lastname@example.org.