How To Identify Waste in Your Business and How to Improve It!
Understanding and identifying waste is crucial to improving productivity, reducing costs, and enhancing profitability. Waste can be defined as inefficiencies that have a negative impact on the operations, growth, customers, and profits of a business. Identifying waste is a fundamental step in the process of eliminating it, and it requires a clear understanding of the different types of waste that exist within a business.
Our team of expert consultants has identified eight categories of waste, each with its own set of characteristics, consequences, and potential solutions. The categories are overproduction, waiting, inefficient operations, transport, inventory, motion, poor quality, and misused resources.
Overproduction refers to producing more or sooner than needed, leading to higher storage costs, clutter, and hindrances to workspace flow.
- Does your restaurant have par levels for each items based on business and seasonal fluctuations to maximize sales and minimize waste?
Waiting is characterized by idle workers or machines, resulting in lower productivity, opportunity costs, and underutilized production potential.
- What does your team do when there are no customers? Do you have a set of tasks to be completed when they are not busy? Is it being used?
Inefficient operations involve processes that are neither efficient nor necessary and do not add value for the customer, leading to higher production and material costs.
Transport refers to excess movement of materials, products, or information, leading to longer lead times and increased transportation costs.
Inventory waste involves having more inventory than needed and excessive handling of inventory items, leading to higher costs for inventory storage space, management, and maintenance.
Motion waste results from unnecessary movement of people or activities, leading to longer lead times, higher production costs, lost time to injuries, and lower production quality.
- Are your stations set up to maximize efficiency and reduce wasted motion? When was the last time you observed your top items being created and watched your team members move – is it as easy and efficient as it could be? What is slowing them down?
Poor quality waste results from poorly made or designed products or services, leading to lost sales, damaged brand, delivery delays, higher costs, and customer complaints.
- Quality is key! What are your customers saying in reviews and feedback about your products? Have you identified any quality issues and themes that you may need to dive deeper into?
Finally, misused resources refer to underutilized or mismatched employee skill sets, resulting in team members not performing to expectations, poor engagement, and opportunity costs of underused skills.
- When is the last time you reviewed your team members’ skillset? Regularly reviewing job requirements and skillsets can help you ensure the right employees are doing the right work to maximize efficiency and talent on your team!
Identifying waste requires physically walking through the business to observe how work is done. It is crucial to see the operations with an open mind, taking notes on what is actually happening and watching processes as if seeing them for the first time. Being curious and asking questions is essential to identifying waste and improving efficiency and LISTENING!
If you are looking to improve waste and wasted time/lost efficiency in your business, our team at Pinnacle Hospitality Consulting can help. We offer a comprehensive business audit and provide a detailed action plan on how to improve your business. Contact us for a free consultation at Morgan@hospitalityconsulting.co.