Don't Let Your Office Go to Waste
When analyzing your supply chain for efficiency improvements, it can be easy to ignore administrative activities. But office activities can constitute approximately 50 percent of the order-to-shipment lead time, and about 60 to 80 percent of all cost pertaining to meeting your customers' needs.
Many companies treat office activities in the supply chain and elsewhere in business as an afterthought when it comes to efficiency and quality. The reason is that administrative functions are not always well documented and waste is harder to see.
When you examine office activities, you'll find waste largely consists of too many handoffs, unnecessary walking, and lack of proper understanding. To gain more insight, it helps to think in terms of the following eight office wastes, which form the mnemonic TIM WOODS:
- Transportation. Refers to multiple paperwork handoffs and too many required approvals.
- Inventory. Excess inventory can include too many office supplies and batch processing of transactions and reports. Unnecessary inventory means increased lead time.
- Motion. Excess motion primarily refers to people having to walk to office equipment or to find people.
- Waiting. Examples include system downtime, paperwork/approval queues, and waiting for information from outside sources.
- Overproduction. Printing paperwork before it is needed, purchasing items before they are required, and processing paperwork before the next step is ready for it may create a queue that will increase lead time.
- Overprocessing. Includes re-entering/re-checking data, making extra copies, distributing too many reports, making excessive transactions, management accounting activities, and adding unnecessary details in expense reports or budgets.
- Defects. This is often due to mistakes on paperwork/data entry, which increase lead time or result in unfilled orders and other potential manufacturing issues.
- Skills. A lean program should utilize employees' skills and ideas. Everyone must generate ideas for improvement and be involved in implementation.
A logical next step in this process is Value Stream Mapping (VSM), a lean mapping technique used to analyze the flow of materials and information currently required to bring a family of products or services to a consumer. Companies use VSM to identify value-added and non-value-added activities and to help create a more competitive overall process.
Companies can also use VSM to observe, measure, map, and analyze the office's processes such as sales quote and order handling, design/engineering processes, approvals, financial accounting, and material procurement.
After applying the eight wastes to administrative functions, you may find a variety of inefficiencies caused by technology gaps, excessive controls, dated process design, or poor layout.
By applying lean tools such as standardized work, visual controls, work cells, and one piece flow to develop a much improved future state, your organization can benefit by reducing work-in-process batch size and information dwell time, compressing lead times (including the order-to-cash cycle), and improving information accuracy.
Now's the time to get motivated to look more closely at administrative functions in your supply chain.