Double the Output of Almost Any Process in 5 Days or Less,
And at Little or No Cost!!!

More than 95% of any process, even some of the best, is waste. In other words, less than 5% of the steps that are taken actually add value that the customer sees and recognizes as value to him.

What that tells me is if we threw away the wasted 95% and put all of the available resources into the 5% value-added steps we should have an increase in output of 20 times.

The 20 times figure is an ideal condition, and we all know nothing is ideal. However, it does help put in perspective that I focus on doubling the output of a process, and IF 20 times is one extreme, that 2 times is almost a given.

If you could see that kind of increase in productivity in days, what would it be worth to you?

It requires a change in the way we currently think about process management. Some of my clients get it right away, and others stand there and tell me that the waste we identified is “absolutely” necessary to do it that way. They just take a little longer to convince.

First map the process steps, and while mapping the process steps as you discuss each task I’d like for you to define each as fitting into one of 7 categories. Color code the process steps on the map according to the colors on the table on the next page.

When you are done, step back and look at the colors. I guarantee you will be amazed. You will see colors all over the place, but only a few, very scattered Green Operations steps where value is added to what you do.

I’m sure you noticed that only one of the seven categories was considered a value for the customer. Everything else should be immediately eliminated, or eliminated over time.

We want to categorize the steps on the process map with only one thing in mind. If the customer doesn’t see

• A change in the product
• Or see Value to him

Then there is no reason to do it. I know that is hard to understand at first, there just seems to be things that we think we HAVE to do to get the product to the customer. However, once we put it in perspective that our job is to figure out how to do only value-added work as seen by the customer, and figure it out either right away or over time, eventually we start to catch on. If it isn’t added value as the customer sees it, there is really no reason to do it.

1. Inventory is necessary. I have to produce 100,000 pieces a month and I can’t do that without having 100,000 to 200,000 parts readily on hand, or at least on order, in the pipeline.

It’s necessary only because that is the way our vendors, our customers, and our processes have been set up to work. I have seen companies drop hundreds of millions of dollars of inventory, months of lead times, and have trucks arrive every 4 hours with supplies. When the truck is emptied, it is immediately loaded with outgoing product. They have just freed $100 million in capital plus the interest it takes for that, 100’s of people moving and managing inventory, forklifts, floor storage space freed up, and an even bigger opportunity—we are much more flexible to a customer’s change requirements. We can literally change the product in 4 hours, and sometimes less.

Problems with inventory

a) Managing inventory takes about 30% of our total resources (If we stopped managing inventory we’d have 1.3 times as many resources and be able to do 30% more than we currently do with the same resources, or it would cost us 30% less to deliver our product.

b) The cost of purchasing inventory ties up most of our capital. In addition, the cost of the loans 8-10% would also be available to us. That money would be freed to increase capacity, resources, profits, and sales. In many cases, just having that money to do any of those things would double our output.

Solution: Just in time, reducing inventory to those needed in hours instead of days or months, Kanban tools that automatically announce when a part is needed (no one needed to track it).

2. Transportation—Moving product. This should be obvious, but often in practice people fight to keep it because they don’t see a way to remove it.

3. Moving People—Same thing.

4. Inspection—Design defects out of the product, design prevention into the steps. Inspection can take not only 10-50% of the time, but the defects that we think we are preventing can be prevented without adding an inspection step. By using inspection to prevent problems we are allowing and expecting defects to occur. The time it takes to fix a defect can sometimes take up 25% or more of the total resources.

5. Wait time—The time it takes for a product or people to wait for something is often one of THE biggest time expenses we have. Many of my clients tell me that it doesn’t cost them anything for the product to sit still. But, if is setting there ½ the time they could easily double the output right there. The biggest problem we have is that we THINK these functions are either necessary, or that we just have to live with them. By changing that perception we can make leaps forward in efficiency.