Posted by: knightbird | February 20, 2015

The Triality of Waste

Lean Thinkers have to strategize in multiple dimensions. I wrote about an example in my last post that assumed 20 minutes of walking waste daily. Over a year, the cost to the organization for allowing that waste penciled out to $2,500. The ability to free up the 83 1/3rd hours by eliminating the waste has the positive consequence of not paying for the walking. But those 83 1/3rd hours can now be dedicated to adding value. When we have 83 1/3rd hours of value, that adds to products or services a customer can buy and pay for. If we don’t improve, the customer is paying for that waste and failure to gain additional productivity. That’s a dual cost, and if we don’t improve, our competitors will and take away the business we do have.

Now lets add another variable. Think of all of the time you waste in government required processes. Add that time up. For your business, that’s waste. For society, there may be a benefit, but that benefit comes at great cost. What is that great cost? Given that we operate in a global economy there are many costs imposed by government that have great benefit for the world, but are not imposed by other governments on businesses we compete with.

So let’s assume we need to interact with a government process. We are required to invest in employee time for compliance with the government process, and so do our domestic competitors. When that government process is ineffective and full of waste, it causes great waste for our organization, especially if we have ineffective processes to deal with the compliance requirement.

If we assume that our own process for compliance wastes 20 minutes a day, and going through the government ineffective process wastes another 20 minutes a day, our cost is $5,000 annually. IF we consider the lost 20 minutes of value adding time every day, then our cost is tripled. We waste 20 minutes of our own compliance process time, we are losing 20 minutes because of the government’s inefficient process, and we lose 40 minutes of productivity. All of a sudden, out cost is $10,000 annually. (I know there is more waste in government processes than my simple assumption, but I am trying to make this explanation simple).

How can we be competitive if we don’t work relentlessly on eliminating this waste? As private organizations, we should be relentless in our advocacy of Lean in Government. We pay taxes (at least at the local level). If our government can eliminate waste, it will cost less to provide and arguably we will pay less in taxes. That goes directly to our bottom line.

Most leaders, business, nonprofit and government, don’t think about waste or its consequences on the cost side of our organization. A couple of leaders in Alaska understand the duality of waste elimination and added Value. I am sure none really understand the Triality of waste when we look at compliance costs and the waste contained in our own processes and the government processes. That’s another reason we are not competitive with so many other states. Let’s change it. Advocate for adoption of Lean with your state government. I am.

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