Manufacturing Waste
PART III.
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Finally, there is a 4-step rule for waste elimination on the journey to world class performance. This can be used to take the cost-added waste out of the total business process as you continually improve performance on your journey to world class. If you have implemented MRP you should have seen a reduction in some cost-added activities. With Class A MRP II there should be another reduction in cost-added activities with the increased performance. With JIT and TQM there should be an additional reduction of cost-added waste and increased reliability in performance. And, with world class performance, 90% of the cost-added activities. The waste and the variability of performance should be eliminated. You can use the 3-step or the 4-step rule on any waste that exists in your business. Take any one of the wastes that we've identified or any other waste that you find in your business and cut it in half, then cut it in half again, then make it 10% of what it originally was. Declare your own war on waste and watch waste waste away. By now you are probably well aware that we are talking about change—changing the way we do things, changing the way we think, changing our paradigms. But change is not easy. There is usually resistance to change. See Figure 8. "We've Always Done It that Way." Figure 8. Resistance to Change This resistance to change must be overcome with education and understanding—understanding the reason for change, the why should we change and encouragement and motivation to make the change. See Figure 9.
Figure 9. Reasons for Change Change is usually caused by one of three things—crisis can cause change to take place. Crisis is a great motivator but usually not the best. An inspired leader may catch a vision of the end state and lead the charge for change. The people may rise up and organize the change. The best possible scenario is visionary-inspired leadership together with educated and willing people. See Figure 10.
Figure 10. Causes for Change This change in thinking, change in paradigms, change in the way we do things regarding costs-added versus value-added and a war on cost-added waste has produced world class results in companies and prepared them to win the war of global competition. Conclusion Wage your own war on waste. Determine the difference between value-added activities (30%) and cost-added activities (70%). Continuously improve the value-added activities but eliminate, get rid of, do away with the cost-added waste activities. Use the 3-step rule for reducing waste—cut it in half, cut it in half again, then make it 10% of what it originally was and you will significantly, fundamentally change the long-term cost structure of a company and prepare your company to win the global war. Try it—you'll like it!
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