|Waiting..., a photo by Serlunar on Flickr.|
This the fourth post in a series on waste...
This is the scenario that causes blood to simmer and then boil. You arrive at your prescribed destination at the pre-arranged time, and ...the other party doesn't arrive, and doesn't arrive, and doesn't arrive. You wonder whether you should find a table and risk missing them altogether. You might not want to stay there on your own. And there might not be a comfortable place to sit.
When it comes to people, waiting can have a lot of emotion attached to it. The folks who live according to the clock interpret lateness (on the other party's part) as a sign of disorganization, disrespect, lack of care and concern, and a number of other not so nice qualities. They may or may not be correct in their interpretation, but they really don't like to wait.
When you are concerned about customer loyalty, cycle times for your processes can be deal-breakers in customer retention. If you take too long to process their order through production and delivery they might risk a customer relationship on their end. They will find the wait unsatisfactory and costly, and may choose not to buy from you again.
The big wait is often the sum of many different waits:
- Waiting for materials to arrive - to the plant or to the appropriate production area
- One team or person waiting for another team or person to finish
- Delays in the hand-off of data
- Waiting for approvals
- Waiting for a meeting to start - determine the hard-dollar cost here by the number of people in the room and the salary dollars consumed during the wait.
Your company's future may rest on the amount of throughput you can achieve. Let's look at some "fun math": If you can only produce 5 products per hour, you only have 5 available to sell. Let's assume that each of your products sells for $100 and yields a gross profit of 50% (or $50).
- That means that at a production level of 5 per hour you would be producing $250 for the company every hour.
- Multiply that by 40 hours per week and you're producing $10,000 in gross profit per week.
- That results in $500,000 in gross profit per year, assuming that you work 50 weeks per year and every product produced is sold.
- At a production level of 7 per hour you would produce $350 for the company in gross profit.
- Each week your contribution to gross revenue would be $14,000,
- And translated to annual terms that's $700,000 in gross profit.
If you perform tasks in batches you have built-in wait time. The last item processed might have a wait of only 10 seconds until it proceeds to the next process step, but to determine your wait you need to average the longest in the batch - 10 minutes? - 30 minutes? - with the shortest time to determine the average wait for the batch. Why do you process in batches? Is it to "simplify" approvals, transportation or other forms of waste? Your efficiency tactics might not be as efficient as you thought they were.
You are probably working as fast as you can given your current process, but this isn't about you. Examine the steps in the process. The process has elements of waste within it that are making your job more difficult than it needs to be, and production slower than it could be. When you analyze your process you might find waste within steps, or the biggest culprits might be between steps, during hand-offs from one person to the next. If you want to achieve more profit and keep your customers happier by not making them hear that tick....tick....tick sound in their heads, fix the process. It's probably not a convenient time right now, but if no time is convenient, then why wait?