Someone once told me: “Don’t go fishing unless you’re ready to wait.”
“Waiting” for the fish to bite is considered by most outdoor enthusiasts as a relaxing, value-added activity. But “waiting” has been found to be a frustrating, expensive non-value added category of cost in many organizations. If asked, you would likely classify the activity “Wait for Customer Order” as inactivity. Inactivity consumes precious time and resources. In fact waiting-related activities have been found to consume significant levels of labor and overhead costs in Activity Based Management (ABM) implementations.
There are three types of ABM “inactivity”:
An ICMS customer recently e-mailed me a list of inactivities to add to the ICMS Activity Dictionary. While it was intended as a joke, it smacked of reality. The list of inactivities included “Attend Meetings”, “Wait for Lunch”, “Wait for Purchase Order”, “Wait for Maintenance”, “Wait for the Phone to Ring”, “Wait for Something to Happen”, “Wait for Approvals” and the ever popular “Wait to Go Home”.
Unsynchronized, multiple step business processes are typically loaded with inactivity and non-value added wait time. For example, on my way home last night I had to travel through a very busy intersection. As I approached the traffic light, I counted approximately 20 cars in front of me waiting for the light to change. In the distance I saw the signal turn green. Instinctively when my eyes see green my foot touches the accelerator to go. However, yesterday I had to immediately brake because the car in front of me did not move for at least 60 seconds. I only made it halfway towards the intersection before the light turned red again because each driver “waited” 3 seconds before moving forward. Wearing my ABM thinking cap, I figured that all of us could have made it through the signal light the first time if everyone had hit their accelerator at the same time.
The same principal applies to a business process. For example, let’s assume that there are 20 activities performed by 20 different people in your Procurement Process. Let’s also assume that each of the 20 employees “wait” 3 hours before performing their 3-minute activity. In this scenario, an unsynchronized 20-step Procurement Process that could have been done in 60 minutes actually waits and takes 60 hours. Waiting adds 59 hours to the process cycle time! Do you have a process like this in your organization?
The October 22nd ’99 Wall Street Journal published an article titled “Why Doesn’t Business, Like Baseball, Create Improbable Heroes?”. Staff reporter Jonathan Kaufman observes that while every baseball postseason produces unlikely players who “go from zero to hero”, the same is not so true in the business world. There are hundreds of organizations that have implemented ABM systems where management is still waiting for profit to improve. All it takes is three simple steps to enable employees to hit profit improvement “homeruns”:
Step 1: Train employees how to read and interpret their activity accounting reports;
Step 2: Define specific improvement target amounts; and,
Step 3: Define positive and negative consequences related to hitting or missing the target.
Don’t get caught with ABM “analysis paralysis”. Take these three simple steps to eliminate the wait for measurable results.
Moses was one of history’s greatest leaders, yet even he couldn’t solve the “waiting” problem by himself. His father-in-law, Jethro, observed people standing for hours to have Moses settle every personal and legal dispute. Moses was frustrated and so were the people. As an alternative, Jethro encouraged Moses to reorganize the work. Jethro recommended that Moses delegate a part of his judging “activity” to men who would serve as judges over “thousands, hundreds, fifties and tens” (Exodus 18:21). Jethro, the Bible’s first management consultant, used the basic principle of Activity Based Management … manage the work, not the worker … to eliminate Moses’ frustration and the waste of waiting. I encourage you to do the same.