Articles and Advice

Cut out the Crap: Kaizen & The 7 Forms of Waste You Don’t Need In Your Startup

Kaizen is Japanese for “good change”.

It’s a principle that is born from the lean philosophy and one that’s adopted by everyone from large manufacturers through to solo startups. If you’re in the early stages of startup and feeling insanely busy but not very productive, Kaizen may be just what you need.

With a focus on creating a culture of continuous improvement, Kaizen is a framework for implementing change through small steps. The philosophy is that by enabling small variations rather than total transformation, change happens quickly and efficiently. And by making change a painless process, everyone in the organisation is comfortable with suggesting areas for improvement.

Be of a Kaizen Mind

Most startups are short on time and short on budget. That’ s why Kaizen is an appealing prospect. It identifies the right places to focus energy.

Many believe that a Kaizen approach to startups is the key to entrepreneurial success.

Entrepreneurs can often feel busy, yet make little impact on productivity. There is little reward for ‘ busyness’ when you are failing to accomplish the important tasks.

There is always a way to do things better

Kaizen shirks the “ this is the way we’ ve always done things” mentality. And in the fast-moving, risky world of startups, this is a pitfall that’ s worth steering clear of.

A Kaizen approach prompts you to remove any activities that don’ t add value. Removing the ‘waste’ can be done through delegating, deleting, simplifyingor automating.

Kaizen offers strategies for early-stage businesses to address waste.

It identifies 7 forms of waste. Ahmed Jaffari from Startup Bahrain provides an excellent breakdown of the seven forms of waste that early stage businesses should address through Kaizen.

The Seven Forms of Waste

Overproduction – Producing more than demand requires. The most obvious result of overproduction is found in inventory levels. Over the short term, tighter controls on scheduling and forecasting can reduce variance and overproduction. Longer term, the shift from make-to-stock to make-to-order will result in a major decrease in overproduction.

Movement – Workers, machines, and transport represent typical forms of waste. Added motion slows processes, increases wear and tear on equipment, and increases work fatigue. Minimising movement with layout or flow changes results in a work cell that is more productive with less wasted movement.

Transportation – Transport costs (equipment, labour, fuel) are incurred by moving raw materials to the workplace and moving finished goods to the customer yet don’ t add any value to the product. Locating the company near suppliers and customers or using technology instead of face-to-face meetings reduces transportation costs and wasted time.

Wait time – Wait time is pure waste, a resource that goes unused. Eliminating wait time is usually a straightforward process, once the problem has been identified. Eliminating bottlenecks allows for a more balanced process and reduced wait time.

Processing – Processing adds cost through the use of materials and labour to complete additional steps. Identification of wasteful processing is critical for the success of lean implementation. The  elimination of the non-value-added processes can result in the reduction of significant cost—and an increase in the profit margin of the product.

Defects – Poorly controlled or ill-designed processes can cause defects that incur direct and indirect costs in lost material and labour. Improving quality by introducing quality control methods, such as sample selection testing or quality control points between processes reduces defects cost. Reducing defects saves costs in the early stages of production and results in heightened customer satisfaction.

Inventory – The cost and space required for inventory are significant, and it generates no kind of return. Inventory is exactly like cash frozen in a bank account—with interest being charged. It is essential to streamline processes, reduce lead time, and implement better forecasting, which will lead to the reduction of inventory held.

Don’ t be afraid to cut the waste. It’ ll be worth it. Big changes can be daunting and time-consuming. Instead, Kaizen suggests small incremental modifications to allow for efficient, cheaper improvements. And for entrepreneurs, it means less busy, more productive.