only on what you know but also on the questioner’s breadth of knowledge.
Often, the least complicated way to handle such a question is, “How about that ball game last night?”
InnOvaTIOn, COnTInUOUs IMPrOveMenT, and ChangIng PrOCesses
World-class methods are applied to make processes work better. There are only three ways to try to make a process better. The first is to simply outsource it and hope the supplier does a better job than your organization. That’s not kaizen (or anything else), but it can lead to big gains if the supplier is better than its customer at what it does and if there are no other significant consider-ations such as shipping times, trade secrets, and so on. Buying other compa-nies or product lines does just about the same thing but has many risks.
The second way is to discover a bold and radically new way to do some-thing that provides a dramatic, stepwise improvement in quality, cost, speed, customer satisfaction, market share, and so on. This category of improvement is generally termed an innovation. An innovation is an improvement in the basic nature of a process, typically using technology. Examples include a new chemi-cal that cuts the curing time of plastic by 50% and using websites to sign up customers (at least some of them) rather than using human customer service operators. (I’m not claiming humans always give great customer service; I’m just using it as an example. If you don’t agree, press four and hold for our next available operator.) Generally speaking, business and society are in love with innovation as a primary mechanism for progress or at least the appearance of it.
It’s easy to understand why. Innovation is exciting. A large number of executives and managers enjoy the challenge and thrill of betting the com-pany, the year, or the quarter on innovations. Innovations are risky—at best, only 1 in 10 works and makes money. Thus, pursuing them provides a thrill akin to hunting wild boar with a spear. Those who lead successful innovations are viewed by the business world as bold visionaries. Everyone remembers Edison for the innovation of finding a filament material that made incandes-cent lightbulbs practical. Nobody remembers the lab assistants who prepared the thousands of experiments to find a suitable filament, or the names of the people who led the production changes that enabled lightbulb factories to be productive enough to make lightbulbs affordable.
But the main reason why leaders love innovation is because it is easy to lead. Innovation requires little cultural change and little change in how leader-ship runs an organization. Innovation can be put into gear by putting money
into research and swinging for the fence. Nothing has to change in a tradition-ally run organization if a stream of sufficiently significant innovations can be realized. Of course, few organizations can keep it up for more than a few years, or a decade at most, because competitors jump right in and eliminate the advantage that the successful innovation created. More and faster innovations are required to stay ahead. Few traditionally run organizations can maintain a productive, creative environment when they get big and successful and/or their markets mature; it’s hard to stay on the edge of persistent disequilibrium when things are working well.
The third and final way to change a process is to come up with a steady stream of small improvements. Any one improvement may not be earth shat-tering (such as eliminating a signature from a form), but when many of them are put together they can have a significant impact on overall performance.
The difficulty with small improvements is that you can’t get them on a reli-able, ongoing basis unless you have a system in place to generate, support, and sustain the improvements. Since a small improvement usually involves chang-ing a small bit of an employee’s task, the employee has to be involved. For the employee to be continually involved, supervision has to provide a supportive environment to keep employees engaged. For this to occur, upper management has to provide the supervisors with the training, support, and resources to create and maintain an environment of engagement. It’s a lot of work, but there’s no other way—a continuous and sustainable stream of small task improvements requires significant changes at all levels. This is the one type of improvement that a competitor cannot easily replicate.
WasTe
Reduction of waste is the fundamental objective of most continuous improve-ment, kaizen, and lean methods. Waste is defined in factory environments as any effort that does not change the form or function of a product. This means that if an activity is not doing something to the product that the customer wants or needs, such as bending metal, molding plastic, assembling a circuit board, cooking a car tire, drilling, sanding, painting, and so on, the activity is waste. In nonfactory environments, the products are information and ser-vices rather than physical objects. The jargon Japanese expression for waste is muda, loosely meaning “junk,” as in, “What’s all this junk doing here on my desk?” In the last few years, waste has increasingly been referred to as “non-value-adding activity” because it sounds more sophisticated than “waste” in management circles and in financial discussions. They are the same thing.
The definition I prefer is:
Waste is energy and activity for which an all-knowing customer would not be willing to pay because the activity does not significantly improve the probability of getting a more reliable, higher-performing product or service over the long term at the best possible price.
This definition of waste focuses on long-term, sustainable gains and eschews short-term gains (e.g., cutting needed training funds to look good for a quarter) that create even more waste in the long term. Companies that compete only on price and/or continuously focus on short-term gains are always in trouble.
Even if they survive, they will never be outstanding, and they are only a wink away from falling into chaos with the next environmental challenge.
Taiichi Ohno, the primary engineer of the TPS, defined seven types of waste for a factory environment. These are shown in Figure 2.1.
Ohno’s wastes apply to offices as well as factories, but the names don’t readily stimulate thinking about many of the complexities that can be hid-den in office processes. To deal with this issue, OK1 presented the “Office Kaizen Wastes,” which are summarized in Figure 2.2. These 26 wastes focus specific attention on sources that often compromise office and administrative functions. The Office Kaizen wastes include office analogs of Ohno’s seven wastes; these are shaded in the figure.
Category of waste
name
of waste definition
People
Motion Reaching or walking
Waiting Of people or parts (not machines)
Processing Extra activity necessitated because a known best way of doing the work is not being used
Quantity (material)
Making too much
Work-in-process, or WIP. Resources invested in output that has been created between processes but is not being used immediately
Moving things Any transport of materials or product, such as forklifts, conveyors, rolling hampers, and so on
Inventory Raw materials and finished goods that are not being used
Quality Errors Defects
Figure 2.1 Taiichi Ohno’s original wastes.
Category of waste
name
of waste definition
People
Goal alignment Energy lost by different people/areas working at cross-purposes
Assignment Energy used to complete an unnecessary task Waiting Of people or parts (not machines)
Motion Reaching or walking (searching, phoning, e-mailing, texting)
Processing Extra activity necessitated because a known best way of doing the work is not being used
Process
Control Energy used for supervision or monitoring that does not produce sustainable, long-term improvements in overall performance
Variability Resources expended to compensate for and/or correct outcomes that deviate from expected or typical outcomes Tampering Energy lost in compensating for arbitrary changes made
to a process without proper study
Strategic Energy lost in processes that satisfy short-term goals but do not provide value to end-use customers/shareholders Reliability Energy lost in dealing with unpredictable process
outcomes
Standardization Energy lost because all don’t do a job in the best way Suboptimization Energy lost when internal processes and areas compete Scheduling Energy lost in compensating for poorly scheduled
activities
Work-around Energy lost by using unapproved, informal processes Uneven flow Energy lost in dealing with the consequences of “empty
spots” or too much work in a process flow Checking Energy used for inspection (and rework)
Errors Incorrect process actions that must be repaired or scrapped
Information
Translation Energy lost in unnecessary data changes/adjustments Missing Energy lost in compensating for missing information Handoff Energy required to handle information more than once Irrelevancy Energy lost in dealing with unnecessary information Inaccuracy Energy lost in dealing with incorrect information Figure 2.2 Office Kaizen wastes from OK1.
For example, “work-around” waste is very common. It is most often seen when someone develops or inherits a spreadsheet application that is then used for a task instead of the software that is “supposed to be used.” Problems arise when data are downloaded from the company system, “run” in the spreadsheet, and then put back into the company system. Inconsistencies arise because the company system and the spreadsheet usually have different assumptions and calculations. OK1 presents detailed explanations and examples of these 26 Office Kaizen wastes.
If Ohno’s original seven wastes were used as a checklist for locating waste in an office, there’s a good chance that many instances of Office Kaizen waste would be overlooked. The office-centric names of the Office Kaizen wastes speed up insights by using language that’s specific to many office pro-cesses. This doesn’t mean that the wastes in Figure 2.2 are etched in concrete or represent the ultimate truth; they are simply one version that helps in con-ceptualizing and searching for office waste.