Information waste in the office environment
In my recent blog about “lean” I discussed the various ways that waste can be defined and how to identify non-value adding activities.
In my experience of lean the emphasis is often on activities in obvious places such as the factory floor and yet other areas of the enterprise seem to escape. It seems strange that attention is made of getting goods out of the factory quickly and efficiently and yet paperwork and office systems escape with little analysis or reform.
In a rudimentary way we can identify the main areas of waste in an office environment. I’m sure that we’ve all experienced most of these in our working lives.
Areas where the processes are often poorly defined and inefficient so “log jams” occur. Perhaps if the process has been made efficient, there is just insufficient resource to make it happen.
Lots of validation checks – multiple signatures
Sometimes there are just too many people in the approval process and most not adding value in any way. Managers hold things up through procrastination, by being a signatory although they don’t actually evaluate the subject matter (sometimes through just wanting the status that goes with it!), or by just not being there to sign when required.
As an example, we all know how impossible it is to raise a cheque within a business!
Processes that are far too complicated. Especially those which have been developed iteratively over time that add little value. Perhaps the processes have not been developed by the people that actually do the work but by a well meaning, or controlling, manager.
Multiple uncontrolled documents in circulation
A lack of document control or a system that isn’t followed because of ill discipline and no “buy in” from employees. Perhaps it’s a process that’s just too unwieldy and complicated to work. Paper copies are often produced that are soon out of date and that may have been superceded by newer ones that are probably electronic. This leads to major risks of poor decision making in the organisation.
Of course multiple copies of electronic documents are made that often clog up servers with duplicates or various revisions. Copies are kept within “outlook” folders. Data is also transferred to Excel spreadsheets for analysis purposes where the document is uncontrolled and often the formulae are not checked.
Batching of documents
Work piling up in in-trays waiting to be processed or for the person to find time to do it. This builds up a pile of inventory. Additionally, in the digital world, emails remain unanswered and filling up “to do” folders in personal outlook inboxes.
Always best to process and move it on without delay!
High levels of data re-entry and re-keying
Incompatible systems relying on multiple data entry to make things happen. Very little value added and a very depressing job to have to do. A major area where mistakes are made leading to re-work.
Production of reports that nobody uses
Overlong, complex reports that are either too complicated or are full of irrelevant information. The reports often take so long to compile that they are not part of the decision making process, as they are too late. Even worse is that some people take time out to read them!
Sometimes are measures brought in that aren’t used by management to measure progress in the business and aren’t related to achieving the business plan. These often have no relation to policy deployment.
Fast track routes that slow-up everything else
Managers or persuasive employees by-passing the proper processes to get their jobs done first. We have all met “he who shouts loudest gets his job done first”. Often the more important tasks are then behind schedule and not completed on time.
Personal filing systems
Official company wide systems such as the Client Relationship Management (CRM) not being used. Addresses then being kept on Excel spreadsheets, in Outlook contacts, business card books or other databases, particularly on smart devices. Paper filing systems in cabinets or desks which are locked or are not understood by anyone else.
Unpredictable processing lead-times
Work taken on without a defined process or when ”guestimated” without proper analysis.
So we can see that there’s an inordinate amount of wasteful activity going on in most office environments.
What’s really dangerous is that it’s often difficult to see and the effects difficult to measure. Additionally these wastes add significantly to the cost base but also affect cash flow and the overall delivery performance of the business.
I expect it’s time for companies in all sectors, not just manufacturing, to get with the “lean” revolution and reduce waste and improve efficiency in their office environment!
Further information on “lean” can be found at www.fedden-usp.co.uk where I am retained as a Board Advisor.
We are told that the way to salvation for the UK’s stagnating economy is for all businesses to export. Additionally it’s not just to our fellow members of the EU but also to the emerging markets around the world.
One could say that these markets have already “emerged” and have substantial economies of their own. In fact many UK businesses lag far behind our competitors in Germany, France, Italy and the USA in creating a presence in these countries. The irony is that some of them are the very Commonwealth countries we turned away from back in the seventies.
The key aspect is that these economies are still growing at some rate and undoubtedly have an appetite for the goods and services that we can provide. An interesting statistic is that China will soon overtake USA as the biggest market for Rolls Royce Motor Cars.
Notwithstanding the challenges facing the service sector, If we focus on manufacturing and engineering businesses, which most would agree have considerable potential to export, how do we encourage companies that see themselves as integral to UK based supply chains to export to new markets?
Since 2008 many businesses have recognised the burning platform of a UK and EU based sales pipeline and, aided by some preferential exchange rates have begun or expanded their exporting efforts. Also firms have been working with partner companies abroad to offshore production or add extra capabilities to their business.
I’m currently working on my next DMH Stallard thought leadership project to explore how companies have made a success of exporting in new markets and developing new capabilities and what they have learned both positively and negatively from the experience.
The report will be published in the Spring and will, as always, disseminate best practice to help businesses benchmark themselves with their peers.
Looking back on the Olympic games I’m sure we are all pleased with the way the Olympic events reflected on the County. Although the mens’s road race didn’t go to plan, or the rest didn’t follow our plan! The other events went extremely well with literally hundreds of thousands of spectators lining the routes to cheer on all of the competitors and celebrate a Gold and Silver medal for Team GB.
This has been a significant success for all of those, public or private sector, that organised and facilitated the events and showed the world what Surrey can do. We now have to build on this success and increase the economic performance of the County.
As some of you will know, we have two recognized LEPs in the County “Enterprise M3” covering the West, along with most of North and Central Hampshire and “Coast to Capital” covering East Surrey, Croydon, the “Gatwick Diamond” and most of West Sussex. We are engaged at senior level with both of these groups to make sure that the interests of IoD Surrey members and the business community at large are promoted.
Additionally we are working closely with Surrey County Council and “Surrey Connects” to help them with their ambitious plans to help grow the local economy. We at IoD Surrey have recently agreed a partnership agreement aimed at boosting business in the County.
Surrey County Council has pledged to spend 60 percent of its spending on goods and services with businesses based in the County and we will be hoping to run an event for members to engage with this process in the Autumn. As well as committing to support “super fast Broadband” in the County, SCC has also announced that it will help fund 200 new apprenticeship positions in the County by offering a cash incentive of £1500 to companies taking on a new apprentice. This is in addition to the £1500 Government grant currently available. More details of this can be found on the IoD Surrey LinkedIn Group page. Schemes like these are vital to attempt to combat the scourge of Youth unemployment and I urge IoD members to do their best to get engaged and support this.
It’s clear that we will struggle to get central government support, as this has been the case regardless of the particular hue of the government of the day. There’s certainly no point wasting energy in complaining. It’s refreshing to see an approach based on practical commitments to work with local businesses taking hold and I’m sure we can all get involved and take this forward in a spirit of partnership.
One of the frustrating things about the “lean revolution” that has occurred in manufacturing and other sectors over the last 20 years or so has been the misappropriation of the term “lean”.
I have heard countless business leaders refer to their operation as being “lean” or “leaned up”, when in many cases all that has been done is a progressive or sometimes catastrophic cutting of overhead to reduce costs. This is exemplified by the traditional focus on maintaining “direct” workers – those that are directly employed doing “productive activity” and the hacking into “indirects” who support and sometimes supervise these employees.
This is often done with no analysis of how processes work within the company. So it’s often the case that the “indirect” is dispensed with but the jobs they do are not. Not surprisingly it falls upon the “directs” to now do these tasks and lo and behold productivity of these employees drops and quality suffers. Additionally, more often than not, delivery deadlines are missed and customer relations suffer.
Of course it’s much easier to optimize processes and improve efficiency in growth times when a business is trying to do more with the same resource. It’s much more difficult, and emotionally draining, to do it when a business is trying to deliver the same with less resource.
One of the key rules drilled in to me during my initial journey into “lean” was “if your customer knew you were doing this- would they be prepared to pay you to do it?”
It’s a good example because it focuses on what “lean” is really about. It’s about focusing on the productive and therefore valuable things your customer is prepared to pay for and removing the wasteful things that they would not be.
For those not familiar with the concept, the world leaders in lean- Toyota (in fact it’s often called the Toyota model) characterise waste or “muda” in seven ways.
Each time a product is moved it stands the risk of being damaged, lost, delayed, etc. as well as being a cost for no added value. Transportation does not make any transformation to the product that the consumer is willing to pay for.
An example of this was a company I once saw shipping items 80 miles away to a sister plant for a couple of tasks and then shipping them all the way back again. Moving the process to the main factory eliminated this. However it’s surprising how far things can move in one factory or office.
Inventory, be it in the form of raw materials, work-in-progress (WIP), or finished goods, represents a capital outlay that has not yet produced an income either by the producer or for the consumer. Any of these three items not being actively processed to add value is waste.
Of course this stuff also takes up productive waste. One often sees stores full of stuff waiting to go out on the shop floor. Think of all of those brochures sitting in the office or storeroom because it was “cheaper” to buy 2000. Multiply that several times and see how much stuff a business has paid for and how much productive space it’s occupying. Modern supermarkets are a great example of how to get this right. Goods inwards and store space is kept to a minimum. Products are delivered on a “just –in-time” basis. When things arrive they go straight out into the shop to be sold.
In contrast to transportation, which refers to damage to products and transaction costs associated with moving them, motion refers to the damage that the production process inflicts on the entity that creates the product, either over time or during discrete events.
This could be wear and tear on equipment, RSI for workers or accidents and specific injuries on site
Whenever goods are not in transport or being processed, they are waiting. In traditional processes, a large part of an individual product’s life is spent waiting to be worked on.
This doesn’t only include physical components or goods, it could include emails in the inbox – or worse a “folder” or paper piling up in the in tray!
Over-processing occurs any time more work is done on a piece than what is required by the customer. This also includes using tools that are more precise, complex, or expensive than absolutely required.
Doing more than the customer expected and sometimes more than they actually wanted and using a sledgehammer to crack a nut!
Overproduction occurs when more product is produced than is required at that time by your customers. One common practice that leads to this muda is the production of large batches, as often consumer needs change over the long times large batches require. Overproduction is considered the worst muda because it hides and/or generates all the others. Overproduction leads to excess inventory, which then requires the expenditure of resources on storage space and preservation, activities that do not benefit the customer.
A good example of this is the clothing retailers who work hard to guess what lines will sell well and sometimes get it catastrophically wrong (I’m sure that lime green double breasted cardigan would sell- now we have 10000 of them!). They are under massive pressure from on-line retailers constantly monitoring demand and placing small orders for small batches to suppliers and delivering what the customer wants quickly and has the advantage of constantly updating their range of clothing on offer. Instead of “just in time” , overproduction is “just in case”!
Whenever defects occur, extra costs are incurred reworking the part, rescheduling production, etc.
Pretty self explanatory- why would a customer pay for you to fix the part they ordered or rework the document, correct the spelling mistakes etc? A hidden aspect is the effect on morale when employees are constantly having to fix things that should have been made correctly. One can think of the old days of British Leyland where cars went into a holding bay after they came off of the line for rework and fixing- totally non-value adding.
There is an “eighth waste” often referred to which is the waste of human talent. In fact it’s the waste that often hinders the resolution of the other seven wastes. Management that are prepared to “let go” and allow their employees to put their energies into innovating and creatively solving problems often reap the rewards.
The key is to address wasteful processes and procedures and change the way the business does things. Often those employed in the business have recognized this for years but have not been given the chance to change things.
It’s been proven that the techniques used to eliminate these wastes not only improve the bottom line performance of businesses, regardless of their sector. It also improves delivery performance and makes the company more marketable.
Having recently joined Fedden USP as Board Advisor http://www.fedden-usp.co.uk I will be regularly blogging on how businesses can improve and detailing experiences of how this has happened in the work place.
I’m very pleased to be joining the team at Fedden USP as Board Advisor.
Fedden USP specialises in helping businesses improve service levels and productivity.
Although the company cut its teeth in the manufacturing sector it has applied these prcatices in various other sectors including retail, logistics, horticulture and the health sector.
Personally it’s great to be working with former colleagues from the former EEF South Manufacturing Advisory Service team which has made such an impact on helping SMEs in the manufacturing sector in the South East & London.
DMH Stallard Completes Merger with Callaghans Solicitors
DMH Stallard LLP, based in London and the South East, today announced the completion of its merger with Surrey based Callaghans. The new firm will be called DMH Stallard.
The merger of DMH Stallard and Callaghans supports DMH Stallard’s regional expansion plans and brings the total number of Partners at the firm to 50.
The team at Callaghans are particularly experienced in property, litigation and private client work These complement the existing specialisms of DMH Stallard, and ensure that a full range of services can be offered to clients from new offices in Guildford, as well as Callaghan’s existing premises in Farnham.
Tim Aspinall, Managing Partner at DMH Stallard, said:
“We are delighted to announce the merger with Callaghans which introduces talented new people to the firm with exceptional experience whilst fitting in with our core strategy. The merger provides an excellent opportunity to build on our success within the Surrey and North Hampshire regions. We already have a strong client base there and look forward to working with many more businesses, organisations and individuals located in this part of the South East”
Senior Partner Jerome O’Callaghan from Callaghans, said:
“Callaghans is known as a niche firm providing an in-depth, personal service to companies, directors and private individuals. We have been considering a merger for some time but it had to be the right fit. We are delighted to have merged with DMH Stallard, because of their excellent reputation and their commitment to building long term relationships with their clients, which is very important to me.”
Partners Jerome O’Callaghan, Belinda Butler-Smith and Stephen Izod will be joining DMH Stallard as Partners. Peter Sturgess and Nick Van Der Borgh will join as Consultants.
I was very pleased to sign a new memorandum of understanding with Surrey County Council on behalf of the Surrey branch of IoD recently.
With economic growth stagnating it’s very important that the public and private sectors work closely together for the benefit of both businesses and local citizens. It’s essential that an “engine room” of the national economy such as Surrey does not rest on its laurels and strives to be competitive within the global economy.
We are committed to do all we can to improve economic conditions for local business, help set the skills agenda and tackle youth unemployment and work with SCC to help grow the size of Surrey’s economy.
(article sourced from the Farnham Herald)
I pleased to say that in my capacity as Strategic Advisor- Manufacturing to leading law firm DMH Stallard we have recently published the third in our series of thought leadership reports into the issues affecting Technology and Engineering businesses in the South East.
The report “Secure your data and protect your business” focuses on how businesses are coping with the so-called “Digital Explosion” and what measures they are taking to mitigate risk, prevent data leakage and improve productivity.
Working with my co-author Frank Jennings, we interviewed several businesses and investigated whether existing methodologies and processes were robust and if companies were embracing solutions that utilized “cloud computing”. We also explored whether companies were aware of the risks of data leakage and what processes they had in place to ensure that their data was secure.
The findings of the report discovered that risk adverse IT professionals within some companies were sticking with tried and tested solutions that were simply not up to the pressures of the modern increasingly digital age. As well as preventing productivity gains there were several instances of employees engaging in sophisticated “work arounds” to circumvent existing processes to enable them to work productively. These often involved using unauthorized or unsecure “cloud solutions”.
Several companies that were interviewed had tackled some of the issues head on and had practical solutions. Most importantly these organisations sifted data and catagorised it and stored it with varying degrees of security according to its risk of loss. The data was the restricted to a “need to know” basis. They also worked at reducing file sizes to enable data to be moved around efficiently. Additionally the report discovered varying accounts of how stored data was backed up and discovered some processes that were seriously flawed and ineffective.
As well as exploring best practice on use of the “cloud” the report investigated phenomena such as Social Media and “Bring your own device” where companies are freeing up employees to use the hardware that they choose and perhaps more importantly significantly reduce capital expenditure within the business.
In common with the previous reports on Intellectual Property and Business Ethics, the report concludes with practical advice gleaned from the experiences of real businesses and tips that businesses of all sectors and sizes can adopt.
A copy of the report can be downloaded at www.dmhstallard.com/data_security
We are currently in the final editing stage of the DMH Stallard report concerned with data security and the use of “cloud computing”.
It’s been a very interesting study into how businesses manage their data and keep it secure when facing the exponential growth of data and what it is doing to their business. The risks of and penalties for losing data can be severe.
It’s been interesting to see how traditional systems are often seen to be struggling and whether the “cloud” can provide the solutions required.
Last week I had the pleasure of attending the 25th Annual Tacitus Lecture held by the Worshipful Company of World Traders at the Guildhall in the City of London.
I have the honour of being a Liveryman of the company and I know that this lecture is one of the annual highlights of the City calendar.
Over 600 members of the company attended the event which was certainly stimulating and controversial. as the attached press article described http://tgr.ph/zQDN0t
Mr Smith was also asked onto the BBC Radio 4 “Today” programme where he again expressed his views succinctly http://www.terrysmithblog.com/
The conclusions of the lecture many will find surprising but perhaps the solutions are in keeping with the straight talking style of Mr Smith.
The video and transcript can be found here http://www.world-traders.co.uk/tacitus2012Public/index.php
In my opinion this was one of the best lectures we have had, particularly when one looks at the calibre and reputations of former lecturers.