When applying lean standards to any business the most important benefit the company will achieve is the elimination of waste. By cutting out waste, it is often possible to increase the profit margins, reduce the time it takes to deliver the product and generally improve the way the company is run. Waste should always be eliminated whether it is a major problem or something small. Looking at seven of the most important reasons for eliminating waste (provided by ElseInc), can help companies remain committed to this process.
1.Waste in a process is costing the ownership money. Employees owe their employers the duty of doing the best job possible. Leaving waste in the process is like throwing their money into a fire.
Any time there is waste it is costing the company money. In the end it is costing the owner of the company or the stockholders money, and when they are losing this money it can’t be re-invested into expanding the business and improving the jobs of everyone in the company.
If a company is not eliminating waste in their own process there is a very good chance that competitors will eliminate it in theirs, thus giving them a significant advantage.
3.Waste in an operation prevents you from gaining a salary increase. In fact your tolerating waste could be considered as grounds for dismissal, because it is evident that you do not care about doing a good job.
It is the responsibility of everyone in the company to find and eliminate waste wherever possible. If an individual is not taking this responsibility seriously they are costing the company money and should be replaced with someone who will.
4.Waste often results in the creation of actual waste that gets land filled, which is bad for the environment.
Protecting the environment is an essential responsibility of everyone on the planet. This is especially true for companies which is why eliminating waste is so important in every type of company.
5.Waste in processes increases energy consumption used in production, which adds overhead costs and is bad for the environment. It also helps drive up energy costs.
Virtually every type of waste will end up costing more in energy, which costs money and has an impact on the environment. Eliminating even small amounts of waste can have a significant benefit.
6.Waste keeps the selling price above what it needs to be so you end up producing less than you could at a lower price. Higher volume sales mean more jobs and more stable jobs.
Any type of waste will contribute to the inflation of the selling price beyond what it should be. Once eliminated prices can go down, production can go up, or both of these can occur.
7.Tolerating wasteful processes shows that you do not care about the contribution made by your production employees. This leads to lower morale, poorer performance, and even more waste.
Anyone who is tolerating waste in a job is not working hard to be the best they can be. This will reduce the work ethic of those around them as well and can actually lead to more waste. If action is not being taken to actively eliminate waste it will end up causing waste over time.
Resource: ElseInc, 9. April 2011