Have you ever given a deep thought in silence what are those enemies which keep stopping you from growing your business or career, what is that which keeps money away from you, Why cash suddenly becomes invisible? What is that which SUCKS CASH IN YOUR BUSINESS?
Here are the 7 Secrets:-
1. Producing more than Your Customer Needs: When you produce more than your customer has needs right now, you have to stock the extra units produced. In order to stock you have to invest spend huge amount of money on storage. Is your customer willing to pay you for this? Moreover if the product so produced extra cannot be sold in the market in future or it gets obsolete. Who bears the cost? Is it Your company or someone else?
2. Inventory: Many traditional accounts professionals think that inventory is an asset in your company. But in terms of Lean Thinking it actually SUCKS YOUR CASH. If you buy raw material just to store in your storage area or warehouse for days, weeks or months. You LOSE MONEY in two forms. First, You block your money in raw material so bought. You will get money for this material only if it is processed further and sold to the customer. The more time this material sits idle the more delay it will take for the finished product to be sold and more delay in getting cash in your hands. Second, You have blocked your valuable space or warehouse just for storing raw material which is not giving you any money unless sold. You could have rented out your space to generate more cash for yourself.
3. Movement: Just recall how many times you have to walk to another department or to the copier machine which doesn’t work most of the time and so on. Now imagine just like you how many people in your company walk around for similar things, searching for someone or something in a day, a week, a month or a year. Just add up all the instances for whole year and you surprisingly find how huge amount of your valuable time you spend on this. Is the company not paying salary for the time spent on moving around for such non-value activities? Is such motion really adding any value to your customer?
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4. Over Processing: Imagine your customer has ordered 100 units of your product or service and when your team has completed 75% of order. Now your customer wants to change his order. Do you often face similar situation? Do you feel frustrated that you to work on your plan all over again according to the customer requirements. All the activities performed with changing needs come under Over Processing. Calling your colleague for clarifying information, checking the specification of the product or information, etc. This unnecessary processing only consumes time and resources and costs you money.
5. Transportation: Transportation can be within as well as outside the office or factory premises. Think of all the transportation of cars, trucks which move are all of worth or some could be avoided. Inside the office how many hands or departments or tables your single unit of work (product or information) travels through. Does it cause delay in delivering to the customer? Remember, delay in delivering means delay in receiving cash from customer. Are you not losing interest on money which is your but lying in your customers hands? And which could come to you faster if you eliminate delays in your internal system.
6. Waiting: How much time do you have to wait for the information coming from your supplier or other department in a day? How much your customer wait due to delay happening because of your colleagues? Remember your company is paying salary to staff for waiting. But, is it adding any value to your customers? Id Your company getting cash in time or with delay? Would your yourself like to wait at a restaurant and pay them happily for the weaknesses in their internal system?
7. Defects: Imagine you have worked completely on what you are doing and handed over it to your next department, colleague or end customer. But it does not match with what exactly they wanted. Now they ask you to make corrections. Do you ever wishes this could have been done right the first time? Will the re-work arising out of this defect not cost you time and resources? Do you want to reduce cost on such re-work?
These are all hidden wastes which only consume time and resources of your company but do not add any value to the customer.
Remember…
– Your customers are not willing to Pay for any of the waste or non-value add
– If things are not done right the first time, they will only cost you time and resources but add no value to your customers
If you think you can ignore all these 7 wastes just try to do sampling of money spent in various parts of your business on daily activities, material, machines, etc. And just add up those for the whole year. You will surprisingly find that more than 60% of the activities happening in your business are only consuming time and resources and adding no value to your customer. Are you ready to bear this much loss?
Want to eliminate all these waste? You need to create your first Value Stream Map. Read further how to…
Step by Step Process to Create Value Stream Map
Have a Question?
Allow us to understand your problems and tell what we can do to help your organisation reach the results you seek. Contact us to schedule a free consultation with us.
