Cash is lying around everywhere in companies, hiding in plain sight. It’s piled high in warehouses as inventory, littering offices as administrative waste, and languishing in inefficient processes. Author Mark DeLuzio, in his new book Turn Waste into Wealth, shows how to get that cash – by becoming a Lean organization.
“Lean is a mindset, or way of thinking,” says DeLuzio. “It’s a commitment to achieving a waste-free operation that’s focused on your customers’ success.” And, any type or size organization can become Lean, he says. “Although widely accepted for improving procedures in manufacturing companies, the fact that Lean can dramatically reduce waste in administrative functions is less well known.” He also notes that becoming a Lean organization doesn’t have to be scary. It doesn’t have to lead to cutting employees or overworking them. His book is a roadmap for making that Lean journey a success.
Administrative functions, unlike manufacturing processes, are typically invisible, says DeLuzio. Accounting, clerical, legal, tax, insurance, utilities, management, order processing, document processing, IT, human resources, and so on are all administrative costs. And the waste that can be uncovered in administrative functions can be overwhelming. For example, the root cause of late shipments may be due to a poorly engineered customer demand oversight process. Flaws in product design, weak forecasting, cumbersome forms, redundant paperwork, endless approval systems are examples of administrative waste. Lean administration can reduce waste errors, processing time, and back-office delays.
“Back-office problems are particularly common in an organization’s accounting and finance functions,” says DeLuzio. “Mis-billing, late billing, and non-billing cost companies millions of dollars a day.”
In short chapters with lots of case examples, DeLuzio explains the purpose, principles, and basic processes of Lean, including how to transform your organization to a Lean culture, what leaders need to do, how Lean accounting practices can promote Lean behaviors, the Lean formula for setting prices, and how to deploy strategy in a Lean environment. He also discusses some of the most important Lean practices such as standard work, TAKT time, kaizen, kanban, and waste mapping.
“Lean is about eliminating whatever is unnecessary in the doing of the work of the enterprise,” says Jeffrey Fox, bestselling author of How to Become a Rainmaker and the Foreword of this book. “Lean is about fewer mistakes, fewer do-overs, less time, less labor, less human effort, less space, fewer defects, less capital, less inventory – less extra anything. Lean is about getting to the simple of it.”
Turn Waste into Wealth is available from most storefront and online bookstores. For more information visit mavenhousepress.com/turn-waste-into-wealth.