How to Identify Waste in Your Business

By Mikesh Raithatha

In business, waste occurs where there is room for greater improvement or efficiency in how resources are used and processes are completed.  This may involve any aspect of the business, including which customers or opportunities are pursued, which systems and processes are used and how staff perform certain tasks, or how the business interacts with other alliances and suppliers for the greatest efficiency. 

Identifying and addressing areas of waste in the business can achieve improved profitability, greater efficiency and better use of resources.  In fact, waste reduction can be one of the most effective ways to increase profitability in a business.

The original seven forms of waste were first identified by Taiichi Ohno, Chief Engineer at Toyota.  He used the process as part of improving the Toyota Production System and it’s now being used by organisations worldwide and across all industries.  The seven steps are:

1. Overproduction – Where are you overproducing? Look for a build-up of stock, work in progress and resources.
2. Waiting – Where do goods and services wait? Which activities are adding value, and which are not?
3. Transporting – Where do things move? Look at moving goods, paper, people and machines.
4. Inappropriate Processing – Are you using the right machine for the job? Are you using the right person for the job?
5. Unnecessary Inventory – Where are you storing value? Look in the piles of raw materials, finished goods, bank accounts and debtors.
6. Unnecessary Motions – Look for waste movement. Check the ergonomics.
7. Defects – Where are mistakes occurring? Do we have rework?

Our waste audit is the first step in a five-step waste reduction process to identify and remove waste from your business.  A waste audit can pinpoint where there is potential waste across each of these areas and help prioritise the waste to be removed/addressed based on the potential financial savings to the business and the ease of removal.  

If you want to learn more about our waste audit and evaluate the potential waste in your business, please do not hesitate to contact us.