Where's the Waste? Question #6

We've been talking about how much excess capacity there is on your business and how fast you turn raw material or labor into a finished good or service. How fast you can deliver your service or product has a lot to do with how profitable your business is.

After you know how fast you can deliver, what comes next? In this video we're going to take a look at the third process question which has to do with your reject rate or waste.

Waste doesn’t just come in the form of material in a dumpster, often times it’s laying around a business in the form of wasted time. Figuratively speaking, you could sweep money off the floor by fixing the places where you’re wasting time.

When I look at your hard waste or reject rate, I look at it from a few angles and I’m folding in what I’ve seen in the turnover numbers with regard to your team and the information we've learned about how well your processes flow.

First, what does this have to do with the tenure of your team? Maybe your employee turnover is high and that’s showing up in your waste. It's rarely efficient to start a new employee.

Do you have bottlenecks that slow people down or cause other parts of the process to park their output while they wait for the next step to catch up? Take a look around your business. Do you have stacks of partially finished work waiting for someone else to finish what they're working on before they start working on the next thing?

Or how about this? How much of your finished work comes back from your customer with defects? Product that comes back isn't just a product and profit problem, its a brand problem which means its a roadblock to growth.

Are you tracking your reject rate or returned goods? Do you know the cause of your waste problem? Do you know how much its costing you in hard and soft dollars? And do you have a plan to fix it?

You should know where all the waste in your business is, and if you don't then you should be asking yourself where it is. If you look, you'll find it.

For more free small business advice and resources check out my site at: https://www.askphilipwilliams.com