rusty_engineIn 1955 in a humorous essay in the Economist, Cyril Northcote Parkinson posited a new scientific law he humbly named Parkinson’s Law. It is an observation that:

“…. work expands so as to fill the time available for its completion.”

In suggesting this, Parkinson goes on to say that:

“… there need be little or no relationship between the work to be done and the size of the staff to which it may be assigned.”

Since then, many have observed the reality of Parkinson’s Law and the linkage between what is to be done and how many are required to do it. Time is the scarcest resource we have and in a world where the the flow of information is growing exponentially, our challenge is to ensure that the work that needs to be done and the work that is expected are one in the same. Too much of what is expected is not necessary and can be called waste.

The idea of waste comes from the quality movement and has been well defined and described for the last 60 years. In this sense it is nothing new but equally most businesses still continue to create waste by:

• Moving people or things unnecessarily;

• Storing more than you need;

• Waiting;

• Over-engineering safety margins;

• Producing more than the demand warrants;

• Defects and errors in what you produce.

The flow-on effects are that some form of correction through inspection, rework, and some form of warranty becomes necessary. Consider, for example, that every business process should have a customer but every business process will also involve activities that do not add value to the outcome required by the customer. That is waste. It is the non-value-adding activity that permeates every process and is activity that may be necessary, but does not do anything for the customer. If you generate a report for another part of the business, then turning on your computer, meeting with other team members to develop the report design, emails to your manager, printing draft copies of the report are all activities that do not add value as far as the customer is concerned. Defining the data required, conducting the analysis and generating a well-formatted report that satisfies the customer’s specifications all value-add and help to deliver what your customer requires. The key point about eliminating waste is to minimise the time and expense of effort involved in the non-value add activities and thereby eliminate waste as much as it is possible.

Why does it matter?

Most processes have very few value-adding steps and the ratio of value-add-activities to the total number of activities in the process is often a small number. This creates the fundamental issue that there is a significant cost to waste that eats away at both the profitability and the resources of most organisations. Some of it is clear and visible, most of it is hidden and invisible unless you look for it.
Consider the waste when a project is cancelled, or a meeting poorly run, an appointment missed or the wrong product delivered. You might say this is simply a cost of doing business but the effects are far from insignificant. They are the internal costs of the failure when rework is required, facilities are marked as unavailable but really are, staff frustration, time lost and its opportunity cost. Then there are the reputational and relationship issues that are external, some visible and some imposed: • The travel time for the staff member or customer to come to a meeting that was poorly run; or • The word-of-mouth frustration shared by others about dealing with your unit; • The time spent waiting for the report that is constantly delayed and the follow-up emails and phone calls to track progress; • The switching costs of stopping what you are doing and starting something new because of an unplanned interruption; • The impact of ‘Reply All’ emails or the disruption of unnecessary cc: and bcc: emails. These are very much a cost of doing business but they are also a significant opportunity for improvement if you can begin the process to eliminate waste.

How to eliminate waste

One of the most important things that an effective manager can bring to the table for the unit they manage is business focus. By which I mean the ability to focus the efforts and products of the unit on the advancement of the firm’s strategic and operational objectives. When you align the unit in this way you make a clear contribution to the firm’s performance and demonstrate the commitment of the unit. But business focus means just that, focus. There are so many distractions that consume the resources of the organisation, none being more irreplaceable than time. Waste is well and truly alive in the provision of services and this is where the idea of a RAMMPP matrix can be a helpful way of reviewing what you are doing and whether it is value adding or wasteful. RAMMPP was developed by GE, as part of their Workout program, to simplify and improve the way work was done. Categorising the key business activities as follows:

Reports

Approvals

Measures

Meetings

Processes

Policies

And then, consulting with your team, to decide if these activities can be dealt with more productively if they were:

• Fully or partially eliminated

• Delegated or migrated

• Done less often

• Understood and simplified

• Automated

These are the obvious ones and they extend to your suppliers as well as internal activities, so you should always be asking why we work this way using these methods. There will be some better alternatives and it will give you some initial learning and experience about what matters in creating value for your customers as well as doing it in the right way.

Continuous effort is needed

More complex situations will require a more careful and detailed analysis but the basic principle is the same: Do these activities, practices and methods add value or are they simply relics of a bygone mode of working? This endeavour will not be something that ends and you will never be able to get rid of it all. It requires constant attention and effort. Like water on the roof, waste will always finds a way to creep into the best run organisation.