Companies continue to drive savings and often look for cost reductions at a macro level or a functional level, (how many times have you heard "we need to reduce costs 5% across the board so everyone feels the pain equally?") removing resources and changing processes with little regard to the impact on macro performance or the long term implications these cuts have on the company (Most likely not all departments are operating at the same efficiency so cutting 5% has a very different meaning depending upon who is involved).  More often than not, already overworked and or undertrained employees must pick up the load and as a consequence quality and a rift between the customer's perceived value and the company deliverable arise.  Companies have succeeded in trimming muscle when the goal was to trim fat.

By making informed and deliberate choices and looking at the process the company can reduce unintended consequences, have a clear idea of where attention must focus on the short term, and understand how it can improve and create competitive advantages in the long term.  No one wants to sacrifice strengths and the opportunity to reduce their operating cost.

In many organizations, upper management develops processes that are then pushed down on the people performing the work.  On one hand there is some logic in this method as upper management should have a better sense of the entire work stream.  On the other hand, they are not the individuals performing the work, they do not know the interruptions, appreciate how the work place layout impacts the work flow, how hand-offs might constrain vital information or resources, so it is imperative that any process review or design include the voice of those individuals performing the work.

Companies should know, and sometimes they need to be reminded that the only costs that are recouped are those associated with the customer's perceived value. Building the widget adds value; getting management sign-off on a form, re-work do not.  Many processes refer to these non value added functions as waste which add cost to operations.  They can be found throughout the entire system, and an acronym from LEAN has been developed especially for them: TIMWOOD.

1. Involve the people actually doing the work, anyone else is merely guessing


2. Identify non value added work.  I've process mapped work before and then highlighted steps that did not add value (to the customer) as areas to focus on.


3. Identify processes that seem to work best.  Regardless of where the work is performed, the people responsible have mostly identified the methods that require the least amount of work and make them as productive as possible.  Pull out what is common as there are most likely variables given conditions in different locations, and make those processes the good ideas or "best practices" as the processes that you want repeated in the organization.


4. Look at infrastructure to support that value-added work.  Supporting operations may be a potential cost cutting opportunity.


5. Do not forget the IT component.  It is key to bring in  company experts to help determine how changes will be affected with the existing technology of how new systems might offer some opportunities.

 

Taking point 3 a bit further, it should be expected that multiple locations or individuals have variations in the process.  According to Dr. Deming, "Eighty to 85% of the problems are in the system.  Only 15 to 20% are with the workers."  Later he bumped that number up to 90%.  Review the various processes and notice that what upper management thought was the way to perform this work is, more often than not, not the way the work is performed.  They are probably doing it better and adapting to real life changes and customer requirements on the fly, all the while seeking to reduce or squeeze out unnecessary work for themselves.  Consider, how often those process plans that management generated are updated?

Adding to point 4 - what ancillary work is performed to support this process.  Most companies focus narrowly on the process and do not realize that these supporting functions must be adjusted when changes are made.

Repeated review and persistence is required as this work does not always seem natural and may not be intuitive, it can often be met with resistance.

To weed out TIMWOOD issues, companies must consider the following when refining  processes:

• T - Transportation (basically what's taking you from one activity to the next and is it as efficient as possible)


• I - Inventory (excess inventory as a result of a mismatch between supply and demand, poor forecasting, poor understanding of customer requirements)


• M - Motion (busyness and not productiveness,i.e. unnecessary actions that cause extra work or can lead to injury or safety issues, examples having to go down a floor to pick up work off the printer, excess key strokes.  Carpal tunnel syndrome, or other excessive use injuries are good examples of unintended costs) UPS's "no left turn" mandate is a good candidate for unnecessary work - this example might also fit under Transportation.


• W - Waiting (The accumulation of wasted time between each step in the process flow)


• O - Overproduction (not just in manufacturing terms, but for example using outside consultants such as legal to perform the same tasks that in-house council can do but is not aware of the need, or ordering of spares because of poor resource control)


• O - Overprocessing (in project management lingo this is called "gold plating", adding extras that the customer does not want and therefore does not value)


• D - Defects (in a word, rework, having to do something over again)