My friend currently owns two houses; one he lives in and one he leases out through a property management company (we’ll call Company X). Periodically Company X needs to go into the rented property for one reason or another. Before going into the rented property, Company X contacts my friend to let them know why and when they are going to
need to enter the property. Each time this happens, my friend politely reminds them that they will need all three keys in order to gain access. My friend doesn’t have to remind them of this but does so out of consideration.
So, the other day, a representative from Company X showed up at the rental property with only one key, and then called my friend wondering why they couldn’t get in! Now, Company X is a nationwide property management company, not some fly-by-night outfit run by Joe Shmo out of his basement. It seems reasonable to expect that Company X would have processes in place to prevent this sort of error from occurring.
Let’s assume for a minute that the representative from Company X had to drive 40 miles round trip – 20 miles to the rental property and then 20 miles back to the office to pick up the rest of the keys. Let’s also assume that the representative was driving a car that gets 20 mpg. Under these assumptions, the representative wasted 2 gallons of gas due to that
error. At the current price of $4.00 per gallon, that would equal $8.00 in wasted fuel. Now, let’s also assume that the representative makes $15.00 per hour and the wasted trip took him one hour. The total paper cost to Company X for forgetting the keys would be $23.00. That is $23.00 that comes out of Company X’s bottom line profit. This is pure waste and lost profit all because Company X doesn’t have a system in place (or the
system they have doesn’t work) to make sure that small errors like this don’t happen. However, the reality is likely that Company X has very few systems in place to even recognize that this was waste in the first place, let alone measure it, track it, and fix it.
In other words, Company X can’t even “see” the waste, no wonder they don’t fix it. I don’t believe that any company would purposefully waste money if they knew that it was
happening. If someone from Company X accidentally dropped $23.00 out of the cash register, I’m sure they would pick it up. I just believe that many companies don’t know how to “see” waste when it is not as obvious as “green-backs” on the ground. I think
that most companies could be improved if they just learned to “see” waste.
When first starting to work with a company, I often hear people say things like, “It’s just $23.00, what’s the big deal?” or , “Yeah, but that is just a one-time thing.” These viewpoints come because people can’t see waste. When someone comes in and points out one thing, it seems obvious to them at that point. However, because they haven’t learned to see waste, they believe that it is an isolated incident that doesn’t happen anywhere else. Over time however, these same skeptics marvel at how much waste has been right in front of them the whole time but they couldn’t even see it!
Learning to “see” waste is one of the key differentiators between the LEO methodology and the traditional process improvement techniques. Most techniques just teach tools and how to use them (which is necessary and useful). However, tools are better utilized by a
person who can also “see” the need for the application of a specific tool at a specific time. Without being able to see the specific need, people will miss apply tools or worse yet, not apply any tools at all! We’ve all heard of the old saying, “When all you have is a hammer, everything looks like a nail.”
Try looking around and spotting waste. You will soon realize that waste is everywhere once you learn to recognize it. If you can’t see it, give us a call, we’d be more than happy to teach you how to “see.”