they <\/em>be willing to pay for?<\/p>\nThey may well be willing to pay for your monthly management reports that are analysed to increase profit and reduce cost, so that potential savings may be passed onto them or additional profits reinvested to improve services. But they probably won\u2019t be willing to pay for those reports which are produced because \u2018they always have been\u2019 and offer no useable insight into company performance or direction.<\/p>\n
Now drill down into your direct customer\u2019s needs based on this new knowledge. Understand what <\/em>they truly need and when <\/em>they need it.<\/p>\nWhere the data comes from<\/strong><\/h3>\nThe next point to examine for overproduction within the finance team is the input, i.e. where the data\/information is coming from. This could be another department, an external source, an ERP system etc. Is there enough trust within your team on the integrity of this data? A lack of trust can lead to asking for more information than is required and requesting it sooner than it is needed to counteract the distrust. Stop. The onus needs to be on the \u2018supplier\u2019 of this data or the source needs to be changed. Do not allow duplication of efforts, instead change the placement of those efforts.<\/p>\n
Finally, look at the overproduction happening within your team. Toyota engineer father\u00a0 Taiichi Ohno was said to require new managers to spend several hours in a chalk circle, standing in one place and observing waste. Translated, this could be encouraging job shadowing or bring in members of other teams to pinpoint \u2018waste\u2019 areas. Look for badly implemented automation as thorough scenario testing may have been omitted. Your team may be adding extra steps or activities which do not add value for either the end customer or the direct customer, e.g. a complex sign-off process involving numerous managers.\u00a0<\/p>\n
People, planet, profit<\/strong><\/h3>\nWithin these three areas consider the triple-bottom-line to understand how the overproduction wastes impact the sustainability of people, the planet, and profit:<\/p>\n
People:<\/strong><\/p>\n\n- Artificial pressures may be placed on work rates<\/li>\n
- Bonus systems may be encouraging unnecessary output<\/li>\n
- There could be excessive lead time for producing output<\/li>\n
- What is delivered may be beyond customer\u2019s requirement<\/li>\n
- Information may be provided before the customer is ready<\/li>\n
- Information may become obsolete and demotivate the team member(s) that produced it<\/li>\n
- Requirements may change while existing information is being processed, due to the length of time it takes to produce<\/li>\n
- Team member(s) could be exposed to harmful printer chemicals<\/li>\n
- Unnecessary increase in number of tedious tasks, such as filing and repetition<\/li>\n
- Automatic sending or receiving of information even when not required<\/li>\n<\/ul>\n
Planet:<\/strong><\/p>\n\n- Printing reports\/documents and transporting these to suitable storage can cause extra emissions and wasted paper (which is more harmful to the environment than plastic to produce)<\/li>\n
- You can release additional cash to spend on the research and development of environmentally beneficial policies and procedures by reducing the overproduction waste<\/li>\n
- Going beyond customer\u2019s requirements by printing hard copies, or even extra copies \u201cjust-in-case\u201d<\/li>\n
- Creation and delivery of required storage solutions (i.e. filing cabinets and folders)\u00a0<\/li>\n
- Energy to power storage facility or even additional space within your office<\/li>\n<\/ul>\n
Profit<\/strong><\/p>\n\n- Delays cause deterioration of data\/information<\/li>\n
- Overproduction increases the chance of mistakes\/defects<\/li>\n
- Reducing the overproduction waste can free up cash<\/li>\n
- You may be exposed to higher storage costs for filing unnecessary documents (even electronically)<\/li>\n
- There could be extra costs of disposal\/recycling<\/li>\n
- Out of date or defective information can lead to bad strategic decisions<\/li>\n<\/ul>\n
The task is not simply to eliminate waste, it is to prevent its occurrence in the first place. Some ideas that my team have implemented with a successful outcome includes running month end as a project. Conduct a project review on what went well and what didn\u2019t go well to understand some of the overproduction wastes.<\/p>\n
Stop insisting on nine to five hours. Innovate and use a demand-pull system. This may mean more hours around month end closedown and less hours during the rest of the month so that the team aren\u2019t pointlessly producing work to fill the time.<\/p>\n
Comply with ISO 9001 standard which will ensure you have established effective and efficient processes that are consistently followed and improved upon.<\/p>\n
There are many options to improve sustainability by preventing overproduction and over processing. It is important to link sustainability to people, the planet, and profit, and for us to share in our experiences of what works well and what doesn\u2019t.\u00a0<\/p>\n
Please use the comments section to help each other become more sustainable and I hope to share further explorations of other lean principles with you soon.<\/em><\/p>\n<\/p><\/div>\n\u00a0<\/p>\n
\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
In a series from Tessa Hebditch\u00a0on how to enhance sustainability in finance using the Lean Way principles,\u00a0part one is on overproduction: how to avoid waste.<\/p>\n","protected":false},"author":2,"featured_media":5790,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[24],"tags":[],"_links":{"self":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/posts\/3860"}],"collection":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/comments?post=3860"}],"version-history":[{"count":0,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/posts\/3860\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/media\/5790"}],"wp:attachment":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/media?parent=3860"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/categories?post=3860"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/tags?post=3860"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}