Entrepreneurs, at the beginning of a new venture, have limited means and therefore should be waste-aware in order not to spoil their so limited resources.
>Have you read part one?
Waste is a central Lean concept widely known and documented. Here is the minimum to know about waste:
Waste is consuming resources without value creation.
Taichi Ohno, father of the Toyota Production System, has codified the various types of waste. Himself and his team spend significant time on factory shopfloor to observe and understand how and where waste happens.
Waste comes in 3 major families: Mura, Muri and Muda. These, although originally observed in manufacturing, are generic and transferable to any industry or business.
Variability (Mura) produces unpredictable results, uncertainty and variation in quality and delivery. Variability may lead to redo or correct what has already be done, thus “costing the double”, especially when the first widget has to be scrapped or a file discarded, etc. The impact of variability are dissatisfaction and corrective actions inducing additional costs.
The unreasonable (Muri) is the use of inadequate and / or poorly dimensioned resources, which carry risks on quality, safety or health; having people lifting heavy loads, overloading a transportation cart… Other Muri are more impacting costs, like renting a large office when a small one is enough, using a sledgehammer to crack a nut…
“Operational” waste (Muda) were classified into 7 original types to which an eighth was added later:
- Waste from overproduction
- Waste from waiting times
- Waste caused by transport
- Wastage due to unnecessary inventories
- Waste in processes (overprocessing)
- Unnecessary human movements
- Wastage due to defects / poor quality
and the eighth: waste of human talent
The bigger an organization, the more opportunities to create waste exist: people and processes work with poor coordination, which means waiting, piling up of Work In Progress (another word for inventory), working on wrong versions…
The bigger the organization the more transportation of physical goods between departments (parts, paperwork, material, documents…) and human motion (walking, handling..), handovers, etc.
The list of examples can go on endlessly. It was all experienced in established companies.
For more details about the Lean obsession about waste, I invite you to refer to the related post.
How can this help startups?
Being waste-aware will help prevent waste. Remember: especially at the beginning resources are scarce and should be used wisely.
It is a question of sound management as well as a showing respect to the prime investors trusting the wannabe company.
It is far easier to prevent waste than to fight to reduce it afterwards, another learning from established companies.
So for instance when planning a layout, it should be done in a way to minimize unnecessary motions, handling, transportation and so on.
To avoid overprocessing and overproduction, think about Minimum Viable Product: the demo widget does not have to be perfect nor to come in huge numbers.
When defining a product or service features, remember that “best is enemy of good”; the customers may not want to pay for all the fancy bells and whistles.
Create a culture of “right first time” to minimize quality issues and the burden of rework or redo.
Wraping up
Waste is burning resources without creating value. Some of these wastes are inevitable and should be minimized, others are avoidable and should be eradicated.
Wastes, their effects and ways to prevent them are widely known and documented, therefore entrepreneurs have interest in using the accumulated and shared experience in order to avoid repeating bad practices.
About the author, Chris HOHMANN
Chris HOHMANN 