Thinking of waste and avoidence of waste – some early thoughts

Continuing from the previous success of Arsenal of Venice in the great tradition of manufacturing there are some early thoughts into the lean and lean manufacturing. There are some early thoughts on avoidence of waste which have contributed greatly in their times.
The Great American Author, Scientist, philosopher, Benjamin Franklin has recorded in his poor Richards Almanac, about wasted time. He also mentioned about increasing profits by reducing costs He added that avoiding unnecessary costs could be more profitable than increasing sales: “A penny saved is two pence clear. A pin a-day is a groat a-year. Save and have.”. The same  thoughts continued in his book “The way to wealth”. Here he attacks carrying unnecessary inventory. here is the text  “You call them goods; but, if you do not take care, they will prove evils to some of you. You expect they will be sold cheap, and, perhaps, they maybe bought  for less than they cost; but, if you have no occasion for them, they must be dear to you”. Another statement form the same book “remember that many have been ruined by buying good penny Worth’s.”  If you look at these statements clearly, these were preaching avoidance of waste and the resulting profitability.
The concept further studied by Franklin Gilberth, who saw that some movements which are waste in the job of a mason. He Saw that the masons bend to pick the bricks and this takes considerable time. Gilberth came up with the scaffold, which reduced the movement and made the bricks available at a waist height. This has resulted in the speed of work.These are some clear early thoughts on eliminating the waste. These became foundation for the lean journey today. In fact, Henry Ford, who was one of the fore fathers of lean thinking got his inspiration form Benjamin Franklin.

The history of lean manufacturing continues. Next we will see the effect of industrial revolution which started around 1750 on the journey of lean.

I would request readers to add the history wherever possible.

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Originally posted 2012-08-19 12:38:00.

Seven wastes in Service industry

The original seven wastes (Muda (Japanese term)) were defined by Taiichi Ohno, the father of the Toyota Production System. These wastes have been often redefined to better fit new organisations, industries, or external pressures. The effect of the waste is visible in a manufacturing industry. Adopting the Seven wastes in Service industry  is really difficult as the flow and the loss due to these wastes is invisible and mostly incidental.

One redefinition of these wastes for service operations by Bicheno and Holweg (2009) is as follows:

1. Delay on the part of customers waiting for service, for delivery, in queues, for response, not arriving as promised. The customer’s time may seem free to the provider, but when she takes custom elsewhere the pain begins.
2. Duplication. Having to re-enter data, repeat details on forms, copy information across, answer queries from several sources within the same organisation.
3. Unnecessary Movement. Queuing several times, lack of one-stop, poor ergonomics in the service encounter.
4. Unclear communication, and the wastes of seeking clarification, confusion over product or service use, wasting time finding a location that may result in misuse or duplication.
5. Incorrect inventory. Being out-of-stock, unable to get exactly what was required, substitute products or services.
6. An opportunity lost to retain or win customers, a failure to establish rapport, ignoring customers, unfriendliness, and rudeness.
7. Errors in the service transaction, product defects in the product-service bundle, lost or damaged goods.
These Seven wastes in Service industry  if recognised, will help the organiational transoformantion extremely easy.
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Ideas for Six Sigma Projects – By Function and Industry

We have discussed the General Ideas and Ideas from Issues earlier. Here is another trigger for you to look into ideas for Six Sigma Projects by function. If you are new in the continual Improvement Journey, these various classifications help you project identification and selection. Classifying ideas for Six Sigma Projects by function will help you to ignite those who have less time to look at general issues.
Few years back it was generally believed that the six sigma method is used for Manufacturing Industry is only. How ever, Many service and IT organizations have adopted this and saved tons of money. Even this method can be used to increase the process speed and lean out the process. You may take up the improvements in a step by step approach which can give you better clarity and improve the system.

Project Selection Ideas By Function

Six Sigma Project Ideas for Finance/Accounting function
Reduce the time taken to close the accounting books (cycle time)
Improve the forecast accuracy
Spending control
Reduce balance sheet risk
Eliminate unstable customers and associated risks
Improve processing of payment to vendors/suppliers
Improve Days Sales Outstanding (DSO) — the average time taken by a company to collect payment from its customers
Reduce payroll process cycle time
Improve cash management processes
Improve payment/collection processes
Reduce electronic financial transaction costs
Reduce the cycle time of reconciliation
Reduce the procure to pay cycle
Standardize the accrual and deferral processes
Cycle time reduction in processing of Invoice generation
Reduction of cycle time in Purchase order generation

Six Sigma Project Ideas for Human Resources function
Reduce the turn around time to hire an employee
Reduce the time to process an insurance claim
Improve employee on-boarding and orientation processes
Reduce expenditures for recruiting firms
Improve hit-rate for successful hiring
Reduce Attrition
Improve timeliness and the value of employee performance reviews
Reduce absenteeism
Improve training efficiency
Improve employee satisfaction
Identify and correct retention issues

Six Sigma Project Ideas for Sales function
Improve cross-sell opportunities
Reduce time required to enter sales orders
Reduce errors and rework associated with sales orders
Reduce customer credit worthiness cycle time
Reduce the number of “bad deals” that are processed
Improve the cycle time of the entire sales order to cash process
Increase repeat orders/customers

Six Sigma Project Ideas for Shipping/Receiving function
Improve on-time delivery of products to customers
Improve on-time delivery of goods to our facility from vendors
Improve documentation accuracy
Reduce line downtime due to shipping/receiving
Improve inventory control/rotation
Improve inspection processes
Reduce the space occupied by the inventory

Now for some of the ideas by Industry. This section can be used by linking the ideas to specific industry

Sis sigma Project Ideas for Information Technology Industry
Reduce network/server/application downtime
Improve process of logging-in to network from remote locations
Improve system reliability/uptime
Standardize computer loads for configuration and support productivity improvement

Six Sigma Project Ideas for Product/Service Design industry
Reduce time required to design a product or service
Reduce errors in design
Reduce production time
Reduce testing time
Optimize Inventory

Six Sigma Project Ideas for Call Center Industry
Increase/decrease (depending on your business needs) average talk time
Reduce abandon calls
Improve employee knowledge
Reduce number of times customer is put on hold
Reduce Call drops
Improve resolution of queries
You may start resolving problems and  one at a time. do not attempt a great improvement at once. In case you have to then pilot the solution and deploy horizontally.

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