The 8 Biggest Wastes in the Business Office

In my first LeanBP Blog post, I explained the “why” for Lean Applied to Business Processes (LABP). Now, I’m going to explain the “what.” What exactly are the wastes that kill productivity in the business office?

I adapted LABP from the basic principles outlined in the Toyota Production System (TPS). As you probably know if you come from a manufacturing background, Toyota became the most valuable producer of cars by mitigating wastes in its manufacturing processes.

To make it easier for you to understand—no matter what type of knowledge work you do—I’ve translated the TPS from Japanese terminology to English, and from manufacturing to business process applications. Let’s start at the beginning, with a basic definition of lean.

Lean is the identification and elimination of wastes in processes.

What constitutes a waste? It’s all about value to your end customer, or lack thereof. According to Lean Thinking: Banish Waste and Create Wealth in Your Corporation, which was the book that first coined the term “lean,” you must define value from the customer’s perspective only. That customer may be the external end user, but in business processes especially you must consider the internal customer as well. If the person you hand off to in a given process doesn’t receive value from you with minimal waste, then it will be harder to satisfy your end customer.

Waste is always defined from the customer’s perspective, not your company’s.

Anything that doesn’t provide value is waste, even if it’s part of your current job requirements.

You might think that your processes don’t have wastes—after all, you probably don’t have enough people to get the job done, and the people you do have stay busy all the time. Here’s the fascinating thing about wastes: they look and feel like work and they certainly keep you busy, but they don’t add up to anything real or valuable. They simply fill up empty space with empty activity.

I want to add an important note here: the label “waste” or “non-value-added” applies to the activity, not the person performing the tasks. The goal of making your business processes leaner is not to eliminate people or blame people—it’s to get everyone working on tasks that add value. People are sometimes shocked when they find out the tasks they’re performing add no value to the customer, but by focusing on eliminating the wastes, they’ll find themselves doing work that serves the customer cheaper, better, and faster.

The Eight Wastes That Sink Productivity in the Business Office

TPS originally identified seven major wastes in manufacturing. For the purposes of LABP, I add an eighth, which is where I’ll start:

1. Lack of organizational focus. A lack of situational awareness and sense of urgency is the most prevalent waste in business processes, and one that distinguishes the business office from the shop floor. In manufacturing, an employee can see a tangible object—a  car—and the need to assemble it, plus he or she likely has a unique role in that process. Visual situational awareness is high, which creates a sense of urgency. In business processes? Not so much. Business process work is mental—the only visual is often the computer screen. There, the email inbox is the main attraction, distracting us from important tasks. We often work on many different processes at once, with little situational awareness outside the task immediately in front of us, and no connection to the organization’s overall strategy. A sense of urgency only appears periodically as deadlines arise, and people and departments optimize their own performance at the expense of the whole.
2. Inventory. Lean for manufacturing discourages the buildup of inventory, which is an investment of time and resources that yields no return. In the business office, inventory’s equivalent is work in process, or WIP. When you have a lack of organizational focus, office workers start more tasks or projects than they can finish. While they wait for information or approvals, they start even more WIP. Soon, they’re devoting all their time to managing, tracking, and reporting WIP. In other words, juggling, not working.
3. Transportation. This refers to the movement of information or materials. You may think you have this one beat in the office because you’re primarily digital, but I find that many organizations still have paper documents to route—and even if you’re completely paperless, movement of information is still arduous and non-value-added. How many handoffs and approvals does it take to complete a document, task, or project? Over time, you tend to add more and more stops along the way, requiring queuing, batching, inspection, and rework.
4. Motion, or the movement of people. Certainly, the carrying of hard copy documents from place to place and the movement of people from meeting to meeting are non-value-added activities. But there’s also the wasted motion of each individual—wasted mental motion. How many times a day do you search for emails or documents? How many minutes does each search take? Multiply those two numbers together to find how much time you waste with mental motion.
5. Waiting. Sure, waiting is non-value-added—but we make it infinitely worse by starting new WIP while we wait. In business processes, it’s wasteful to start a process too soon or too late. Finding the optimal cadence for the whole organization and not just for individual convenience is paramount.
6. Defects. Not doing a task right the first time. In business processes, this waste is ubiquitous. Rhetorical question: what percentage of the time do you receive inputs you need from others to do your work, and how often are those inputs 100% complete and accurate? My informal poll from hundreds of knowledge workers is that the numbers are very low. Multiply the percentages together for each handoff required in a business process, and you get what we call the rolled throughput yield. The number is typically less than 10 percent, which means that 90% of your energy is going to what lean practitioners call the “hidden factory”—the factory where everyone’s busy but nothing gets done.
7. Overprocessing. Doing extra tasks that don’t actually benefit the customer. Inspection due to variation in processes, searching for situational awareness, and excess precision, tracking, and reporting are all activities that internal customers wait for and external customers pay for, but which neither party values.
8. Overproduction, or producing more output than the customer wants. Although in business processes we can’t build more green Camrys than we can sell, we do have too many reports, too many emails, too-large distribution lists, and too many courses of action due to lack of organizational focus.

All the activities above would probably satisfy your boss, because if you’re doing them, you look busy enough to earn your pay. But do they satisfy the customer? That’s another story. Lean Applied to Business Processes has a standard, visual, repeatable, teachable methodology to help you identify and eliminate the eight wastes that are holding you back, so you can provide more value to your customer and spend less time doing things that don’t make your organization profitable.

On that subject: my next LABP program runs September 24-28 at the University of Tennessee.

Coming up on the blog: an animated visualization of WIP that will change the way you look at your work!