This month we present the third segment of our research series on “Targeting Hidden Inefficiencies”, which focuses on how Operations can uncover and eliminate wasted costs resulting from ineffective coordination. As regular readers of this blog will know, we’ve focused a lot of effort in recent months on identifying hidden sources of waste within Operations – these are sources of inefficiency that are difficult to track or measure and, as such, can lie under the radar for executives.
With this upcoming study, we are applying this framework to approach the topic of coordination from a cost-based lens. While improving communication and alignment with business partners are issues we’ve worked on before with members, this time we’ve pushed ourselves to think about how poor coordination between parties actually manifests itself in the form of wasted costs for Operations. Some examples of waste that results from poor coordination are: too many handoffs, duplicate or redundant processes, and dirty inputs and rework – all of which can lead to wasted staff time for your Operations group.
Let’s take a concern we often hear about from members: dirty inputs, which lead to either rework or quality problems. In a recent survey, over half of executives said that the biggest source of quality problems that Operations spends time fixing originate from outside of Operations itself. And, given a range of different contributors to quality problems, executives selected human error from business partner functions as the leading cause of these quality problems. With regards to managing work, it’s clear that one of Operations’ top coordination priorities should be communicating more closely with business partners to eliminate sources of dirty input and rework.