7 Types of Waste Productivity Leaders Eradicate

March 16, 2015 — 1 Comment

How much is waste costing your organization? It’s possible you may not have thought much about it before. After all, things are busier than they’ve ever been and we all have our jobs to do. As long as we can get the work done and enough funds are coming in the door, it’s a good day, right?

You’ve heard the old adage “a penny saved is a penny earned.” But consider the following business scenario: if your operating profit is 10% and you are able to eliminate enough waste to lower your costs by 10%, your profits will nearly double without earning any addition revenue. Pennies aren’t worth much in today’s dollars, but add a few zeros on the end and it adds up quickly.

You don’t need to be in a profit-producing role or be Six Sigma certified to be a productivity leader. There’s waste everywhere – in for-profit and non-profit organizations alike – and in every function. It’s a leadership responsibility to identify and drive out waste when we see it.

Money Down Drain

Following are seven common forms of waste, ordered to fit the acronym TIMWOOD. A little research can return much greater detail than here, but the key is to start building this into our productivity mindset.

Transportation

Wasted transportation occurs when people (or parts) take more movements than required to complete a task (or if the task requires more movement than it should).

Ex: A service team isn’t able to complete a job one day and has to return the next day to finish (thereby making two trips rather than one).

Inventory

Wasted inventory are materials in any stage from raw materials to completed products that are not creating additional value. Inventory ties up cash and space that could be used in other ways and adds additional risk (theft, depreciation, expiration and non-recoverability to name a few).

Ex: Ordering extra items now for “peace of mind” when they could be ordered at a later time quickly and for the same cost.

Motion

Wasted motion is extra movements above what is required to complete a process.

Ex: Requiring several clicks to access the most important page on your website instead of putting a direct link on the home page. (The extra clicks are wasted motion – and additionally you risk losing traffic with each extra click).

Waiting

Essentially all time spent waiting is waste, unless it can somehow be redistributed to add value.

Ex: Having all work groups wait until everyone is ready before deploying (instead of staggering deployments – like airplane takeoffs on a runway).

Over-production

This waste occurs when production happens sooner or in greater quantities than are required for a given time frame.

Ex: Preparing 100 lunches for an expected capacity of 80 just to be safe (the 20 extra will be wasted cost, unless they can be sold elsewhere in the required timeframe or saved for later).

Over-processing

This waste occurs when processing specifications exceed what is required by the customer (or the appropriate standard).

Ex: You paint your house with three coats even though the paint is guaranteed to hold its color with two coats maximum (the extra paint used is waste – not to mention the extra motion required).

Defects

Defects are the waste that occurs when a job must be redone due to error or incompleteness – and includes any time, effort and funds lost in the process.

Ex: Any job done wrong the first time – although there are much higher ramifications between a defective print job and a defective heart transplant.

Bonus: Unrealized potential of human capital

From a leadership standpoint, don’t forget your number one investment: your talent. There’s no substitute for developing others. Don’t let your people leave for better opportunities elsewhere due to neglect.

Which area can you improve to keep ol’ TIMWOOD from taking up residence in your organization?

Nathan Magnuson is a leadership consultant, coach, trainer and thought leader.  Receive his ebook Trusted Leadership Advisor by subscribing to his website or   follow him on Twitter.
  • I’ve waited a lot of time by just waiting or not taking action quick enough. Still learning to be proactive and not wait.