In your growing and changing small business, finding the time to focus on anything for longer than a few seconds may seem like a miracle. Chances are that your days are spent focusing on a host of different issues and problems that affect your daily operations and also your bottom line. While every business owner strives to make their business run like a well-oiled machine, chances are that there are metaphorical and literal “nails in your tires”: in your daily, monthly, and yearly operations that are causing them to leak air.
Lean consulting is a series of simple procedures that are hand-tailored to identify areas of waste within your company. Once the area of waste are identified, systems that are simple enough for your lowest level employee to complete are put into place to help combat waste and save you money in the long term. Interested? Read on.
- What is waste? Any business, in any industry, has “sunk costs” related to the operation of the business. These sunk costs can relate to anything from (and are not limited to) paper, staplers, copiers, paper cups, food items, and, most importantly and expensively, labor. For example, if you work in a coffee shop and it takes eight ounces of milk to make a twelve ounce latte, and your baristas consistently pour ten ounces to make a latte, you are wasting two ounces of milk per every latte made. That may not sound like a lot, but if you sell 100 lattes a day, that equals 200 ounces of milk, which translates to roughly two gallons of milk a day. Two gallons of milk at $2.00 a gallon times 360 days a year equals $720.00 a year that your business is losing in milk cost alone. You can work any item into this equation. More importantly, this concept can be extremely costly when it comes to labor. If a certain task takes your employee two hours to complete, and you are paying that person $25.00/hour to do any task, you are essentially paying, at minimum, $50.00 for that task to be completed. If the task could be simplified to only taking one hour to complete, you would save $25.00 every time that specific task is completed.
- How do you mitigate waste? Unfortunately, some amount of waste is the price of doing business. Restaurants will always break plates, and offices will always use a mountain of paper copies. That being said, waste can be eliminated in a number of different ways. In order to ensure consistency in your business, you must create systems that ensure that everyone in your business is doing the same tasks the same way every time. Furthermore, these systems have to be simple enough that your lowest level of employee can complete them in the same order and the same amount of time as your most qualified employee. For example: if your copy room is set up so that every piece of material your employees need for making multiple copies are all in separate parts of your office, it will take your employees just as long to gather all of the supplies to make copies as it will to make the copies themselves. By putting a system in place where all the supplies are readily available and the steps are clearly laid out for how to use the copier, you employees will save time and you won’t run the risk of losing ink and paper on unnecessary copies.
- What if there aren’t areas of waste in my business? No matter how efficiently your business runs, chances are there is room for improvement when it comes to cutting down on wasteful operations. In small businesses that experience rapid growth and change, employees will often come up with their own systems because no one has the time to put standards into place. This do-it-yourself attitude, while extremely beneficial in the world of start-ups and small business, can be deadly when you are scaling your company into bigger markets. You may find that your employees are using methods that are not replicable and only make sense to one person on the team. Sometimes it takes a fresh set of eyes to see where is room for improvement.
At Idilus, we pride ourselves on offering industry setting standard service for all of your human resources, staffing, and training needs. Contact us to see how you can start to implement the principles of Lean into your business and start saving money today.