SimplicityIn Business: Get Back to The Basics
Businesses are complicated. In order to be successful, you need to know everything about the industry and market, not only your company's product or service. With so many moving parts that can impact a business - suppliers, customers, competition - it takes a lot of time and effort just to keep up with each one.
The good news is there's an easier way: simplicity in business. Businesses who have mastered simplicity have more money for growth opportunities because they're not spending their resources on tasks that don't matter as much as they once thought they did.
Why is simplicity in business so important?
Simplicity in business is important because it allows for an easier path to growth by narrowing the focus on items that will push you closer to your company’s goals.By focusing on what matters the most, you will in turn cut out processes that are not pushing you towards that benchmark. Additionally, by simplifying your processes, you will save time and money that can be put towards other areas of the business that are in need.
How do you identify what can and cannot be simplified?
Figuring out what can and cannot be simplified is a matter of 1) identifying the process, 2) determining where there is waste, 3) focusing on removing the waste that has the greatest impact to the business with the least amount of effort to implement.
As a starting point, many companies use the 7 Wastes of Lean to help them simplify:
- Defects– Defective work can cause several problems from rework to scrapping ruined work. This takes away a significant amount of time that could be used for more productive work.
- WaitingTime – Waiting time is one the easier parts of waste to identify. It the time that passes when a project is no longer moving forward due to one or more of the other 6 Wastes happening!
- ExtraMotion – Extra motion happens when employees need to handle an item more than could be necessary. The idea around this is to design a process where people do not need to spend a lot of time positioning and repositioning the items being worked on.
- Excess inventory – It can sometimes feel like you need to have extra inventory on hand just in case there is an unpredicted increase in demand or production delay. As time goes on, this excess inventory often doesn’t add any value and only increases your storage costs.
- Transportation– This type of waste comes from moving resources from one place to another for no sort of value add. Not only are you paying for the transportation, but you are also putting the material at risk for damage.
- OverProduction – Over production often will lead to the other 6 wastes to become present. By producing more than necessary, you are increasing the cost of production, you will likely need more transportation and motion, and inherently you are increasing your waiting time.
- OverProcessing – Over processing becomes a problem when you are adding features to your product that customers don’t see as value add, instead they are just ‘there’ and don’t make a difference for the customer.
Business simplification process
To start working down the simplification path, it is good to start with identifying one problem that needs to be solved. You must first identify that problem, define the scope of the problem/project, and begin to chip away one solution at a time. We often use the PDCA method – Plan, Do, Check,Act.
Business simplification tools…When should they be used?
There are a few key tools that companies use to improve and simplify their processes. Lean, Six Sigma, and Theory of Constraints all work towards the same goal but vary in their approach to identifying the problem and then solving the problem.
Lean – Lean is focused on process flow improvement and is more general observation focused.
Six Sigma – Six Sigma is focused on process variation.This tool is more commonly used to fine tune process to make them more efficient.
Theory of Constraints (TOC) – The Theory of Constraints will help you identify bottlenecks in your business that are holding you back.This lets you flush out parts of the business that, if improved on, would have the biggest impact on improving the overall ‘flow’ of the business.
We often see companies start with TOC to help them identify the bottlenecks, then use Lean to improve the process flow, and finally incorporate Six Sigma principles to really refine the process and meet the goal of continuous improvement.