Process efficiency to cut waste

Once you have identified the sources of waste, and how much it is costing your business, you should look at the most cost-effective way to reduce it.

It's a good idea to focus initially on quick wins - things you can do immediately that will reduce waste almost instantly. You might also want to consider quick fixes - putting in place a temporary solution to a problem to give you time to design a more permanent answer.

It is essential to prioritise cost improvements, as making a change to eliminate a problem might not always be cost-effective. The main focus should be on dealing with those problems which are most costly to your business because they will have the biggest impact on your profits.

Analysing process waste problems

It is likely that 80 per cent of your waste can be attributed to 20 per cent of the sources you've identified. One way of easily seeing the key problems is to produce a Pareto chart to show the sources of waste graphically. This technique helps you to focus on the most important areas for improvement.

To create a Pareto chart you need data on the main sources of waste as percentages. You can make a Pareto chart by taking the largest percentage first and then adding subsequent percentages in descending order to create a bar chart. You should be able to produce a Pareto chart using most spreadsheet programs.

There are various other techniques and tools that you can use to analyse waste and quality problems from your business processes.