The Continuous Improvement Blog

How to eliminate waste from your back office operations

Written by Colin McArdle on 23 May 2018

how_to_eliminate_waste

For any company in the service industry, ensuring the end-to-end process of delivering a service to a customer is as efficient as possible is a priority.

But too often, organisations spend too much time on tasks and activities that don’t provide any value for the customer.

If you think about your back-office operations, what tasks and activities have no bearing on the customer? In other words, what happens behind the scenes that isn’t absolutely necessary for your customer?

I’ll bet there are plenty of these non-value adding tasks and activities happening in your back office.

The reality is that these non-value-adding tasks, or ‘waste’, as it is referred to by Lean practitioners, are likely to be impacting on your ability to deliver a fast, efficient and error-free service for your customers.

This is where Lean comes in. Lean is a systematic approach to removing waste from your processes. And in this blog post, we show you how.

What does waste look like?

There are seven types of waste that affect the productivity (and profitability) of your back-office operations.

Which of these is your organisation most guilty of?

Over-processing - Are you wasting time doing more than is truly necessary?

Examples: Staff filling out multiple documentation with the same data over and over; Multiple signatures required; Collecting unused or unnecessary information.

Waiting - Are you experiencing delays that disrupt the work flow?

Examples: Slow systems; Delays in receiving data; Waiting for approvals or signatures.

Over-production - Are you producing materials or documents surplus to requirement or not in line with requests?

Examples: Printing and filing of additional documents ‘just in case’; Unbalanced batch work; Sending mass emails.

Rework - Are you regularly having to rework activities due to poor quality or errors?

Examples: Order entry errors; Production planning errors; Lost files or data.

Motion - Are staff losing time due to unnecessary movement during a process or activity?

Examples: Moving between departments, buildings or systems to complete a simple task; Poor workspace layout.

Inventory - Have you excessive ‘work in progress’ or more supplies than you need?

Examples: Batch processing of transactions and reports; Lack of sufficient cross-training meaning only one person can do the task; Ordering equipment before it is needed; Files piled up between desks.

Transportation - Are you losing time due to unnecessary transportation of materials or documents between locations?

Examples: Moving paperwork in and out of storage; Using remote printers’; Poor workspace layout.

Process mapping

To identify waste in your organisation, you first need to understand the current state of processes.

Value Stream Mapping (VSM) is a Lean tool that helps organisations visualise how the end-to-end processes work. This method provides us with a graphical illustration of all the key people, resources, activities and information flows required to deliver a service to a customer.

Creating the value stream map involves directly observing what happens in the back-office. In Lean, we call this going to 'Gemba'. You’ll need to take photos and videos, and speak to staff. This is the only way to understand exactly what happens and to identify non-value adding activities.

So what happens once you’ve identified waste? You can then take action to eliminate or remove it.

Process improvement

How you eliminate waste from your processes often depends on its nature. The benefit of Lean is that there are many tools that can be applied to solve specific problems.

Let’s say you are a retail banking company and are consistently seeing errors in documentation due to human error. This means additional rework which takes staff away from delivering value to customers. And for the customer, it may result in their request being fulfilled later than expected.

In this instance, you may want to introduce error-proofing to how you manage internal documents. Error-proofing is an easy method that can be applied to detect and prevent errors, so that they simply cannot occur, or are flagged when they do.

Or perhaps your staff are losing time due to unnecessary movement during a task. In this instance, you can introduce 5s workplace organisation to ensure that the working space contains all the equipment, information and resources needed to complete a task. 5s involves eliminating what you don't need from the workplace and arranging everything you do need so you can locate it quickly. It means time isn’t wasted locating equipment or searching computer systems for files or documentation.

Waste exists in all organisations, and not just in the service industry. A Lean approach focuses on identifying and removing this waste so you can deliver greater value to your customers, for fewer resources. The result is happier customers, improved staff morale, and increased revenue for your business.

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Topics: lean, service industry, lean services

Colin McArdle

Written by Colin McArdle

Colin McArdle, the Founder and Managing Director of Kaizen Kulture is a Lean and Six Sigma Master Black Belt who has over 30 years industry experience. Kaizen Kulture's mission is to be true to the ethos of continuous improvement.