How much money does 'non-physical re-work' cost your business?

We can spot physical re-work activities really easily within our businesses. The piles of physical stock being re-machined, the concrete being re-laid, the reports being re-printed.

The non-physical stuff is harder to spot however. The costs associated often go unnoticed and we just assume that our teams are working as effectively as they possibly could be.

But what if we could see them?

There are three common places that I see these difficult to see re-works taking place:

Process Re-Starts
When a business process has to be re-initiated because of some problem with the information this is re-work. The time invested by the staff is lost in most cases; if you're not measuring the time invested and the level of process re-starts you might miss this one. Add a checklist, train the people, do whatever it takes to stop the false (and expensive) starts.

Down Stream Re-Works
If feedback to supplying areas of the business is not forthcoming you may find that one department will fix the issues of another department, again the time and costs get lost in the busy-ness of day to day working. This could be an estimating team handing over to a planning team, or a sales team launching works orders or a contracts department feeding a legal team. Open and honest communication usually resolves these issues, but only if you are keeping an eye out for them.

System Housekeeping
Having clean data in your systems is essential if they are to work properly. Housekeeping should be a light touch activity for your system administrators to oversee, but if the requirements to correct data is large this is another issue where we are effectively re-working the information held within our systems. Training and management discipline often resolve issues, but constant data correction is a cost to the business that can largely be removed.


Spotting these and other non-physical re-works is something that you have to be proactive with, otherwise the associated costs lie in your business and zap resources that could be used for something else, something more profitable.

So, be honest about the re-working that is taking place in your business and construct a plan to sort to resolve the underlying issues.

If you are a user of our StreamLiner software then I recommend that you use the CCC tool and create optimised actions plans directly to tackle this issue. (If you have no idea what StreamLiner is check it out here.)

Apart from the costs, the increase in effective capacity for your business will be really noticeable once you tackle these issues.


Giles


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