Waste has a way of hiding in plain sight. It is rarely ever apparent that waste is happening because you don’t have work processes that you do just for the sake of doing. Waste hides in the gaps between the essential steps, adding up over time. And it will stay there, sucking up your resources, unless you know how to spot it and stop it.
It sounds like we are describing a criminal; in some ways, we could be! Waste can be criminal to a business because it is an obstacle that gets in the way of businesses providing value to the customer – ultimately costing you extra time and money.
You may already know that your processes could be improved, but you don’t know what needs fixing or the fix. At Adastra, we help our clients identify where non-value-adding steps or processes are taking place through the use of lean tools such as value stream mapping. From there, we can put an appropriate plan together to tackle waste and encourage continuous improvement to ensure the non-value-added tasks (waste) do not happen again.
This is one of the fundamental basics of lean thinking – reducing waste to be able to run your business as efficiently (leanly) and profitably as possible and provide ultimate value for money for your customers.
Lean principles may have been born in the manufacturing industry, but they have not stayed there. Lean can be applied to any industry to reduce waste. This series of articles will walk you through the eight wastes of lean, defining each and providing examples that can relate to any industry.
Chapter 1 – Defect Waste
Defects happen when a product or service does not meet the required standards. When this happens – the product or service itself is wasted, the time and effort put into that product or service are wasted, and now you must use additional resources to produce the same level of output.
Anything that requires re-doing is a defect. Any product, process, activity, or information flow that is not right the first time leads to defects. When you hear the word ‘defect,’ your mind automatically goes to a defective product – but defects don’t exclusively exist in the manufacturing industry. Here are some examples!
Examples of Defect Waste in an Office Environment
Take a report, for example, the ‘product’ is a report that shows accurate information on the reported period. If data is entered incorrectly, the results will not be accurate. The error of entering the correct data results in a defective report which must then be re-done. The time spent analysing the first report is wasted. The raw materials are wasted – for instance, if you printed the report or the electricity used to run the computer on which you were doing the report.
Other examples of defect waste in an office environment include billing mistakes, incomplete documents or forms, bad drafting, data entry errors, incorrect client details, or filing errors. Any work passed on that needs to be completed, corrected, or requires clarification, cost the business time and money when re-doing the task.
Examples of Defect Waste in Hospitals
In hospitals, there are many opportunities for defects to happen. Patient charts being filed incorrectly or the wrong dosage calculated can result in the wrong medicine or wrong doses being administered to a patient. They have now wasted the medicine from the first dose, the time the nurse spent administrating it, and the equipment used to administer it. Not to mention the obvious risk to the patient! In addition, they have to do it all over again – this waste could have been avoided.
Other examples include: Carrying out additional tasks because results or previous samples were lost.
Examples of Defect Waste in Sales
You may have heard the sales term ‘the customer is always right’, and there is a reason for that! The ‘product’ of sales teams is the experience and service given to a customer. When this does not meet customer standards, this is a defect.
Defects in sales can arise when incomplete or inaccurate information is input into the CRM. Your sales rep can’t sell accurately if they are armed with misinformation.
Your sales rep may have to spend extra time working out what went wrong and what the customer really wants, often annoying the customer if they have already provided this information. Defects and misinformation in the sales process can cost big time as they often lead to losing contracts, sales, or deals.
What is the real impact of defects?
Organisations should always aim to minimise defects as they directly affect the bottom line of the business. Sometimes it can be hard to recognise what defects add up to. Here are a few things that happen when defects go unresolved:
- Increased customer refunds and return rates
- Decreased customer satisfaction
- Increased cost due to correction or replacement
- Poor customer retention
- Lost contracts, deals, or sales
Reduce your carbon footprint through lean principles
We live in an increasingly eco-friendly world. In each example, resources are being unnecessarily wasted across different industries. The centre of lean principles is straightforward: tirelessly working on eliminating waste from work processes. Lean aims to help businesses become more efficient by reducing their environmental footprint through less waste.
The solution to eliminating or reducing defects
Every industry and business will have its defects – the solutions for reducing these are unlimited.
However, we wish to prevent waste from occurring in the first place within lean thinking. This is why we encourage our clients to invest not only in fixing their processes but also in their people. By empowering teams with sound processes and training, you can harness their talents and allow them to quickly and efficiently solve and prevent problems. Avoiding the occurrence of defects instead of reacting to them.
The harder you work at reducing waste by applying the principles of lean, the more value-added tasks you will have. This ultimately increases your bottom line. What business doesn’t want that?
Read Chapter 2 of Eliminating Waste with Lean: Over-Production
Did something in this article ring a bell? Speak to our consults today to reduce defects in your workflow. Arrange a call with one of our consultants by contacting info@adastra.group.
