It's Time to Wage an All-Out War on Waste

Harvard Business Review

In 1996, James P. Womack and Daniel T. Jones popularized the term "lean thinking". It was their expression for what they'd observed studying Toyota's manufacturing operations: an absence of waste. Today, lean concepts have moved beyond the factory floor to become an organizing set of principles and practices applicable to all business operations and activities, including entrepreneurial start-ups. Every idea in your company can benefit from a lean approach, be it a product, process, service, or strategy. But what does it really mean to be lean?

It's often easier to describe what lean isn't than what it is. Lean isn't about being spartan, skinny or stingy. It isn't about slash-and-burn cost cutting, reducing headcount or beating up suppliers to get the lowest price. Being lean means systematically removing anything impeding the free flow of value to the receiving party. Lean innovation isn't about doing more with less; it's about doing better with less. That might sound like a nuance, but think about it: You've undoubtedly said "no more" many times, even about something good. When was the last time you said, "Let's not have better"? There's no limit on better.

To keep your innovation efforts lean, you have to wage an all-out war on waste. There are seven basic varieties:

Overproduction. Anything done without regard to demand counts as overproduction. That includes something as simple as processing an order before it's actually needed. Uber, a just-in-time limousine service that doesn't take advance reservations, has successfully excised this waste.

Overprocessing. When there are too many non-value-added steps to achieve a given outcome, you've got overprocessing. Examples include too many operations to complete a phase of work, the effort needed to inspect and fix defects arising from poor tool or product design, and redundant data entry due to a lack of integration between multiple systems. Amazon banished overprocessing with the "1-Click" innovation.

Conveyance. The very best you can hope for when transporting goods, material, and information from one place to another is that nothing goes wrong. Conveyance is a necessary evil to be reduced wherever possible, and the U.S. Postal Service is in decline because technology is helping us do just that.

Inventory. Any time inventory builds up, it creates unhelpful pressure to reduce or eliminate it. A visit to the average car dealership — an experience many consider painful — is a case in point: the buildup of cars is the root cause of sales pressure and unfriendly consumer tactics.

Motion. Needless repetition of any process (even a lean one) sucks time, productivity and cost. Even the best companies struggle with this. Last year, a large tech company wanted to buy 500 copies of the ebook version of Guy Kawasaki's Enchantment, and the employee responsible for doing so tried Apple's iTunes first. Apple's instructions were to buy 500 gift cards, scratch off the back, and then enter individual codes one at a time into iTunes. At that point, the employee tried Amazon, where he ended up making 500 individual credit-card purchases. "This fried my brain," Kawasaki says.

Defects/Rework. Everyone has experienced a defect of some kind: errors, inaccurate or incomplete information, flawed products. It's obviously important to reduce the probability of these things happening. Surprisingly, however, it's not always a top priority. According to a 2010 survey from the U.S. Department of Health and Human Services, one in every seven Medicare patients in hospitals is subjected to a serious medical mistake, contributing to the deaths of an estimated 180,000 people a year. Of those, roughly 80,000 were caused by errors that could have been caught and prevented, with the simplest of methods — standardized checklists like those used by every airplane pilot — as surgeon/author Atul Gawande so rightly points out in his book The Checklist Manifesto.

Waiting. Tom Petty had it right: the waiting is the hardest part. Whether it's an endless, unmoving queue, being stuck in idle while you wait for an approval to proceed, or simply a slow connection speed, we've all experienced waiting and the accompanying sense of helplessness and lost productivity. Both MinuteClinic and WellnessMartMD have eliminated the dreaded healthcare waiting room by minimizing procedures to those that are quick and easy to handle.

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