It’s time to take out the trash. But we’re not talking about the takeout containers, crumpled Post-Its, and La Croix cans pilling up in your office garbage cans.

We’re talking about the waste you can’t see: business waste. The inefficiencies littered throughout your business that tend to stay hidden, but can make a large impact over time. Business waste may seem innocuous, but it’s costing you both time and money.

There’s good news, though: Our partner manager Joe Corcione sat down with Trainual certified consultant Greg Gunther for the inside scoop on eliminating waste in your business. As the director and co-founder of Your Business Momentum, a consultancy firm putting SMBs on the fast-track to success, Greg helps business owners mature their systems and maximize efficiency. And one of the ways he does this is by —you guessed it — identifying and getting rid of the waste weighing down their businesses.

So together, Joe and Greg outline the three steps business owners need to take to eliminate the costs of hidden business waste.

1. Identify the business waste holding your company back.

The first step to eliminating business waste is actually pointing out where it exists in your business. But if this is your first time even hearing about business waste, how do you know where to start?

Greg developed a Business Waste Checklist based on the production system outlined in the “Toyota Way” — the guiding principles that define the car manufacturer’s organizational culture. His checklist focuses on the seven wastes common in most businesses (whether they’re involved in manufacturing or not). These are:

Overproduction

In other words, producing more than what your business needs. This type of waste is commonly found among businesses in the manufacturing industry. For example, when demand for a product dies down, a business might continue production as normal — possibly to keep production lines running as normally as possible and to keep employees in their jobs.

However, this decision means using more raw materials and leaving businesses with more inventory than they need (keep this in mind — it’ll pop up again later).

For businesses in the service industry, overproduction might look like having too many employees during a certain period of time (this is especially true for seasonal businesses like landscaping or construction that have periods when business is slower).

Waiting

Think of waiting as the gap between a handoff. More prevalent in service industries, they’re those periods of time when one employee is waiting for something to be done by another employee. Large waiting gaps can lead to pushed deadlines and delayed releases, which ultimately affects the customer experience.

We’ve all heard the adage: “Time is money.” Imagine how much money waiting is costing you.

Transporting

While similar to waiting, this type of waste has more to do with time wasted transporting raw materials and products. It’s an issue especially prevalent these days given the global problems with supply chain management. Your materials could be sitting on a dock somewhere, held up by transportation inefficiencies.

Inappropriate processing

Consider this: When archaeologists dig up a fossil, do they use picks and brushes or dynamite and jackhammers? That’s the general idea behind inappropriate processing — it’s about having the right tools and processes in place for the jobs that need to be done.

That could look like using a process that has three unnecessary steps. Or maybe you have to do everything manually when you could have an automated system helping you. Either way, we’re talking about time wasted — and you know what we say about time.

Inventory

Remember when we mentioned inventory issues in overproduction? Having too much inventory can be a huge waste for product-based industries. Your stock ages, and as new models roll out, your wares become outdated and obsolete.

Plus, you could have products that literally go bad — while sell-by dates don’t necessarily mean your goods are expired, that doesn’t mean you should still have them on your shelves. (We’ve all bought something past its expiration date — it’s not a nice feeling.)

Motions

Let’s say you have a printer at the back of your office. It takes about 30 seconds to walk between your desk and the printer. So if you print something, you spend about a minute just walking. But what if you have to print something 20 times a day? 50? 100? (100 printed documents is its own sort of waste, but we digress.)

Basically, there are a lot of unnecessary motions and movements happening in your business that cut into your time and your team’s productivity.

Defects

Mistakes happen. But when you constantly have to redo something because you did it wrong the first time — that’s when you’ve got a waste problem. Think about it: Do you have a product that’s being returned more often than not? Or are you getting angry calls from customers complaining about your services because your team “didn’t do it right the first time”? Those are defects at work.

Bonus: Passive skills

“There is actually an eighth waste,” Greg shared. One that isn’t included in his original checklist. “I feel like we’ve got a lot of skills that are sitting passively in our teams. Because we’ve put [our employees] in particular roles, we think of their roles as being just that. But often those people have other skills.”

Your team could be a goldmine of under-utilized talent that you actually need. Letting employees expand and use their skills outside of their predetermined roles can help your business and boost their job satisfaction.

Now that you’ve familiarized yourself with the definitions behind the different types of business waste, you may already know how and where these apply to your business. Jot them down — they’ll be important for the next part.

2. Calculate how much business waste is costing you.

So, you have a list of business waste that’s affecting your bottom line. But not all business waste is created equal — determining how much your waste is actually costing you can help you figure out the best way to start tackling it.

That’s where the Waste Audit comes in.

Greg recommends looking at your list and focusing on your top three waste categories. From there, you want to rate how easily you can remove your waste on a sliding scale.

Here’s an example: Let’s say you own a landscaping company, and one of your services is replacing lawns with sheet mulching. One of your wastes is transport — AKA, going to and from home improvement stores to buy your raw materials. But it’s not as if you can change the location of your local Home Depot or Lowe’s — that’s a relatively hard fix. So, you can’t eliminate your transporting waste easily.

But, let’s say you almost always have mulch left over whenever you finish a project (that’s overproduction). The solution: Buy less mulch, which is an easy fix to your waste problem.

You want to cross-reference the ease of removing the waste with the impact it will have on your business’ bottom line. That way, you’re eliminating the waste that is both easy to remove and saves you the most time and money. Or, as Greg likes to call it, “your low-hanging fruit.”

“I’m pretty confident when I walk into a business I’ll find up to 25% of inefficiency. Imagine if we recovered half of that and what that might mean for our bottom line. It’s not stuff we have to lay additional costs for. It’s money we can capture that’s already in our business that we can throw straight to our profit line.”
<blockquoteauthor>Greg Gunther, Trainual certified consultant and director and co-founder of Your Business Momentum<blockquoteauthor>

3. Create systems that eliminate and prevent waste.

We’re going to let you in on the secret to eliminating business waste: It’s process. “We know that 80 to 85% of what goes on in our business relates to processes,” Greg said. “What we don’t do well is capture those processes.”

So, once you’ve identified the areas of business waste you want to focus on to reduce costs, you need to consider how you’re going to avoid that sort of waste in the future. And the best way to do that: building processes that are expertly planned to prevent waste.

That’s why Greg has a specific Creating Systems Guide that walks you through documenting processes. He likes to start with the “Critical Client Flow,” a map of the customer journey from start to finish.

The flow helps you understand the customer’s experience and ultimately helps you determine the processes that will support your business — without the waste. That includes:

• Where and how customers find your business.
• What happens once they find you (AKA the initial point of contact).
• How you solve their problem.
• The aftermath and how you might nurture them if they’re a potential returning customer.

Once you know your customer’s journey, you can develop the processes that will bring you through each step as seamlessly as possible. The great part is that with a system like Trainual, you have a one-stop shop that will house all your processes and detail your team’s roles and responsibilities along the way.

“We want to systemize as much as we need to support our expertise.”

A little waste isn’t going to make or break your business. But when cleaning up your act and automating your processes means saving costs, it makes sense to prioritize eliminating business waste.