Identify the Inefficiencies in Your Business

Tips for identifying the inefficiencies in your business and taking action

When you start a business you will fully intend to run it as efficiently as possible.  However, over time it is likely that inefficiencies will creep in.  When business processes become inefficient you will inevitably find that time and effort are being wasted. In addition you’ll be wasting money so that profits will be reduced.

To combat inefficiency, you need to examine all your processes. You can get help from an expert consultant and you can also take action yourself to identify the three enemies of efficiency, rigidity, variability and waste, that may be undermining your business.

Let’s look at the three enemies and what you can do to understand them, identify their impact and take action for improvement.

Rigidity

Businesses need to be flexible and adaptable, as do employees.

In a rigid process people may wait for others to make their contributions before making their own. What’s more, they may not get on with anything else until they receive those contributions.

If employees are allowed more flexibility, however, they’ll know they can get on with other things while they wait.

It should be noted thatflexibility doesn’t mean unstructured. Employees need to be clear how to manage their time/workload rather than being left to simply react to things.

Variability

Combatting overly rigid processes is the first step in managing resources ‒ allowing staff to better utilise their time. Expecting 100% utilisation, however, is unrealistic.‘Stuff’ happens and your team need to deal with it quickly or risk creating a bottleneck.

In the modern office, teams can be pushed to work at near 100% load. This means there is no flexibility to deal with unexpected variability. By viewing workload across entire teams, however, you can introduce flexibility and improve your capacity planning.

Say, your design team currently needs to make all changes to graphics within a document. Training other staff on how to make minor changes to graphics will alleviate this bottleneck and allow for greater variability.

Wastes

Waste can be broken down into eight branches: transport, inventory, motion, waiting, overproducing, over-processing, defects, and skills.

These give us the memorable acronym TIM WOODS.

Transport ‒ This can apply to the movement of anything from goods, to people, to documents. Even a small amount of transport waste builds up. Finding ways to decrease movement, shorten the distance or reduce item sizes can help minimise transport waste.

Inventory ‒ Anything you buy or produce in bulk can be suddenly become redundant. Be as lean as possible with what you buy or produce, getting only as many as you realistically need.

Motion ‒ People need to move around to do their jobs e.g. between floors or meeting people elsewhere. This physical movement takes time, money and effort which can quickly lead to waste. Look for ways to rationalise where people work to help minimise motion.

 Waiting ‒ This is connected to rigidity (above). If people wait to proceed until someone else has made their contribution, you create waste. When different teams have different priorities, you can create long delays. Introduce more flexibility into your processes to minimise time “waiting around”.

 Overproducing ‒ If you produce more than you need, stock turns into inventory (see above) and risks redundancy. Improving this may require new technology or processes but will help to avoid overproducing and paying to hold stock.

Overprocessing ‒ How many checks are there in a process? By providing clear briefs you will help to minimise the checking needed, the number of mistakes made and the number of people included in the process.

Defects ‒ Mistakes take time to correct and are demoralising for staff. People need to know clearly what’s required, what the intended outcome is, what’s important, and how to go about it. Otherwise, they will experiment with novel processes to achieve an unclear objective, introducing mistakes and inefficiencies along the way.

Skills ‒ People need the relevant skills for their tasks. Sounds obvious, I know, but managers often misuse the skills within a team. For example, I’ve seen experienced copywriters being used for time-consuming admin tasks and I’ve seen interns being thrown onto sales calls.

By working through each of these potential areas for inefficiency, you will gain a good overview of the processes used by your business and a fair idea on how to improve them. However, remember that it is important to be flexible in your approach. In a startup, for example, it may not be possible to establish clear processes as people are managing multiple roles.

If left to continue unchecked, inefficiencies can run a business into the ground. Customers don’t feel they are getting good value, the company struggles to make a profit, and frustrated employees jump ship. So, as a business owner it is important that you make it a priority to review your processes.  You will be able to do a fair amount yourself and with your team.  In time you may want to call in an expert so that you can adapt even more quickly to the changing demands of your customers and the economic environment. 

ABOUT THE AUTHOR

Marieta Bencheva is co-founder of Consulthon,a UK Management Consulting Expert Network. Businesses can raise a Business Challenge and the network’s experts will brainstorm solutions. After selecting the answer they like the most, the business can book a paid one-hour advisory call and deep-dive session with that consultant. All the consultants are vetted by Consulthon and the platform offers businesses access to a wide range of skills, in a variety of sectors and countries.