CONSULTANTS TO THE AFTERMARKET

Bill Wade

 

14 Common Office Inefficiency Profit Drains

Lean Process Improvement Is Not Just for the Shop Floor

By Dr. Dave Kwinn

Here are some tell tale signs of inefficiency that may lead to process changes that boost both employee satisfaction and profitability.

Office inefficiency is insidious.

In most offices people are working hard and putting in longer hours... but customers may not be getting the service they expect and employees may be frustrated or stressed.

Many businesses operate with a laissez faire attitude about some of their most expensive functions: sales, marketing, finance, and customer service. Inefficiency in these processes may be perpetuated year after year.

Efficiency in factories and call centers is tracked and trended, but office efficiency generally is not. Here are some sure signs that there are simple process/profit improvements waiting to be discovered:

  1. Nobody can tell you how long it takes to do something, like issuing a quotation or processing an order. When you ask how long it takes to process a quotation, you may hear that “There is no average.” I think this means that the time to do something can vary so greatly that the concept of an “average” seems irrelevant. Indeed the range probably is great, but a process can’t be improved until tasks are categorized in some way.

    For example, the time to issue quotations may range from 1 hour to 6 weeks, but some analysis might show that simple quotations take 1 to 2 hours and complex ones that 5 to 6 days. Once the work is categorized, it can be standardized and controlled. With controls come measurements and trends, which can be used to improve the process.

  2. Expediting is built into the process. Expediting by definition is re-work, a non value added operation. What is the relationship between the cost of expediting and the cost of the standard process? If it takes 10 minutes to place a purchase order and each order takes 20 minutes to expedite, could this indicate that the basic process needs to be improved?

  3. “Hurry up and Wait” describes how employees process their work. Periods of dead time occur during they day because transactions do not flow smoothly from one step to another. In addition the available work fills the available time. In other words, everybody looks busy no matter how much work there is and there is no tracking of how many resources are being wasted.

  4. “Firefighter” turns up in job descriptions. If management believes fires are a normal business process that requires firefighters, it would seem that the business does not believe its processes can be improved and controlled. If there is no expectation that processes will be improved, they won’t be improved.

  5. There is no way to tell how much work is in process. ‘In’ baskets may be filled and there may be piles of files on a desk, but can you tell what work is flowing through the process...and perhaps more importantly, what work is stalled? If there is no tracking system for work in process, a Request for Quotation could “get lost” and miss a deadline.

  6. There are no clearly visible quality metrics for the process. Revising, correcting and redoing are accepted as normal office processes, and there is little expectation of a perfect product on the first pass through the process. A business may not be tracking the percentage of perfect quotations vs. quotations with errors or omissions. The errors or omissions may end up leading to rework and lost profit later.

  7. There is no differentiation between the number of levels required to approve a request vs. the number of levels that need only be informed of the request. For example, something may be routed to 6 people sequentially for approval, but in fact four of the people only need to be informed of the approval. In this case, keeping the four people in the information loop, but out of the approval loop could save time.

  8. People create work for each other that does not benefit the customer. For example, an order may require engineering approval, but the approval make take so long that operations starts processing the order pending approval, and then finds out that an engineering requirement will necessitate a change in some work that has already been done.

  9. Some people train their colleagues to do their job for them. There may be a checklist for sales people to use when entering a new order. Some salespeople may use it and others not. The one’s that don’t fill it out train customer service people to do work that should be done by the person who is closet to the customer.

    For example, if an order comes with incomplete shipping instructions, the customer service rep has to delay the order to get information the salesperson could have easily added when taking the order.

  10. Escalation is more a rule than an exception. A formal escalation process is a good thing. The question is what percentage of work is being escalated? What is the trend in escalations? How does the business determine what would be an acceptable level of escalation? These questions might lead to some interesting insights into how well the business is controlling its processes.

  11. The whole end to end business process is not readily apparent to everybody. People may not know how their part of the process impacts the rest of the people in the value stream. Something of that seems to have no little importance at one process step may have huge consequences later. For example, if an order is entered with incomplete shipping instructions, at the time of delivery there may be delays and penalties because of a missed requirement.

  12. Customers are shuttled from one person to another and have to repeat their account number and problem over and over again. It is surprising when a customer has to key in his account number into an automated system, then gets routed to another person who asks for the information again. Why pay people to gather information that should be on the system, and irritate the customer to boot?

  13. Excessive use of phone mail. Some people don’t even answer their phone when they are available to pick it up. This results in putting all messages into a kind of warehouse where they will sit until some later date. An even more interesting occurrence is leaving a voice mail message as follows: “I am not able to take you call at this time; if necessary please call my cell phone at xxx.” So now the caller has to place two calls, and may well end up in two voice mail systems, which results in more wasted time.

  14. Disorder, both apparent and not apparent. It would be hard to make a convincing argument that it is efficient to work in a disorderly environment. I have seen offices so messy I had wondered how the occupant got over mountains of files and equipment to get to the desk. Did I miss seeing a hidden crane? Granted, some people are prone to clutter, but how much time would it actually take to find something in all the mess? Could anyone else navigate through the mess? Some clutter is not apparent. What about files on the computer? Can the employee or anyone else find information quickly?

How to increase office inefficiency

The first step is to assess the office environment in terms of the issues raised above. If it looks as if there is an opportunity to improve, then employee awareness should be raised about the consequences of inefficiency. If the employees have never thought about their own inefficiency, they make take offense at the thought that their efforts are being questioned.

The right approach may be to ask about barriers to productivity that employees would management to remove. Employees can then make constructive suggestions without feeling like they are on the hot seat.

Along with the suggestions, the next step would be to start brainstorming about a tracking system for critical quality elements, such as time to issue quotations, errors in order entry, and so on. This would also be an opportune time to create an end-to-end value stream map of the administrative process to help uncover opportunities that may not be immediately evident.

For a sustainable improvement in office efficiency, management must make a clear commitment to change and set a good example. In addition, a process has to be put in place to reward employees for finding and eliminating non-value adding activity.

There may be some quick hits, but for long-term success, the quest for improvement has to be never ending and systematic.

Process improvement expert Dave Kwinn has joined Wade&Partners to provide a new resource for application of Lean and Kaizen in manufacturing, distribution, engineering and office functions. Kwinn is a Black Belt and broadly experienced in Lean Supply Chains. He is fluent in Spanish, a major benefit when addressing shop and warehouse improvements both in the US and Mexico.

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