I recently watched an interesting episode of ABC’s Four Corners which focused on the cost to the health system of carrying out unnecessary tests and procedures. It really got me thinking about the importance of identifying and eliminating waste.

What is waste?

When we talk about waste in businesses, we are referring to resources which are used in a process or product that do not add value. If an organisation can systematically identify and eliminate waste, their product/service will be less expensive to produce with the same or better quality. This means a better outcome for both the organisation and its customers.

Identifying waste

A great way to tackle the issue of waste is to map the organisations systems and processes. You can then start asking questions about whether inputs into those systems and processes are necessary and add value to the output. If the answer is no, then the organisation really has to look at how to eliminate those inputs.

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Eliminating waste

Eliminating non-value adding inputs from systems and processes will often have a big impact. This is the “low hanging fruit”. Once this type of waste has been eliminated, the organisation should then start asking the “is there a better way?” question. Whilst inputs into a system or process may add value, they can still be inefficient. If an organisation can be proactive and constantly seek to find a better way of doing things, then even more waste can be eliminated. This should not be a once-off exercise. Organisations should review systems and process at least annually to ensure that opportunities to reduce waste are seized at the earliest opportunity and that inefficiencies don’t creep in. An organisation that can master the elimination of waste will have a significant competitive advantage. Their cost of doing business will be lower, profitability higher and customers happier.

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