Cost cutting doesn’t work. No surprise. But wait. Then why do so many organizations think it does; or at least demand their employees achieve these results? Could it be the focus on improving the bottom line at all costs (pun intended)? Perhaps.

Question:    if cost cutting doesn’t work (and it has been proven so many times that it does not) what can we do to improve our operating performance?
Answer:      Waste reduction!

What does that mean? Waste reduction, or eliminating wasted resources, is a concept that starts with a mindset. Wasted resources are wasted money. Something none of us want.

Next, identify exactly what wasted resources really means. By the way, there are eight (8) deadly “wastes”. To remember them, think TIM WOODS:

• T – Transport – Moving people, products & information
• I – Inventory – Storing parts, pieces, documentation ahead of requirements
• M – Motion – Bending, turning, reaching, lifting

• W – Waiting – For parts, information, instructions, equipment
• O – Over production – Making more than is IMMEDIATELY required
• O – Over processing – Tighter tolerances or higher grade materials than are necessary
• D – Defects – Rework, scrap, incorrect documentation
• S – Skills – Under-utilizing capabilities, delegating tasks with inadequate training

The third step is to document processes to see where one (or more) of the wastes are. Process documentation is actually very easy. Simply write down the steps in any process in the order they occur. Use the universally accepted symbols in any of the Microsoft Office products if you would like to make the process map look crisp.

Yet the single most important piece of this puzzle, and what trips up many organizations, is the lack of cultural commitment. Every organization has its own culture. Unless your organization has a culture of waste elimination it won’t work. In other words, this is not a temporary fix; it is how you work; permanently & consistently.

If your firm has this culture, congratulations. If not, it should become a goal to create a culture of continuous process improvement.

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