Office Cost Sinkholes:
Measuring and Eliminating Waste
DC Wood Consulting, LLC
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Objectives / Agenda
Learning objectives
• Fitting office Lean into the industrial Lean paradigm is
not a useful shortcut.
• Dollar measurement of waste is how to build a long term
strategic approach.
• Survey data on dollar waste in the office environment
can yield surprising results.
Agenda
1. A changing workforce
2. Theoretical models
3. Measuring the cost of office waste
4. Tools and techniques for improvement
Part 1
The changing places we work
Copyright 2014 DC Wood
Consulting, LLC
Shift from factory to office
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Factory occupations
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Food Preparation and Serving Related
Buildings and Grounds Occupations
Cleaning and Maintenance Occupations
Construction and Extraction Occupations
Production Occupations
42,401,920 to 28,733,210 jobs (1997 to 2011)
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Office Occupations
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Management Occupations
Business and Financial Operations
Computer and Mathematical
Architecture and Engineering
Community and Social Service
Legal Occupations
Education, Training, and Library
Healthcare Support Occupations
Sales Occupations
Office and Administrative Support
53,623,630 to 74,376,630 jobs (1997 to 2011)
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Service occupations
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Healthcare Practitioners and Technical Occupations
Personal Care and Service Occupations
Installation, Maintenance, and Repair Occupations
Transportation and Material Moving Occupations
24,127,360 to 24,759,150 jobs (1997 to 2011)
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Part 2
Theoretical models
Classic factory muda
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Transportation
Inventory
Motion
Waiting
Overproduction
Over processing
Defects
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Bicheno & Holweg* 7 wastes
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Delay for customers
Duplication
Unnecessary movement
Unclear communication
Incorrect inventory
Poor customer service
Errors/ defects/ damage
*The Lean Toolbox (4 ed.). Buckingham, UK
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W. Lareau* 4 categories/ 19 wastes
• People (goal alignment, assignment)
• Process (control, variability, tampering, strategic,
reliability, standardization, sub-optimization,
scheduling, work-around, uneven flow, checking)
• Information (translation, missing, handoff,
irrelevancy, inaccuracy)
• Asset (fixed assets not used)
*Office Kaisen 2 ASQ Quality Press
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Go to gemba: what is office work?
• Meetings (group, oneon-one)
• Phone calls
• Sort e mails
• Make decisions
• Search for data
• Analyze data
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Fill out forms
Report information
Manage projects
Follow up
Work action lists
Make plans
Change tasks
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Observable waste categories in office work
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Group Meetings (time spent to no good purpose)
Distractions (not good distractions)
Messaging (phone calls, emails, text messages)
Arrangements (physical space use, virtual
organization)
• Health issues (illnesses, pain, appointments)
• Motivation (unengaged, don’t care)
• Poor results/ workflow (poor results, bad
decisions, poor work flows)
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Part 3
Measuring the cost of office
waste
Response collection
• On 1-17-2014, 614 emails were sent to
individuals selected from contacts I have
made over the last 7 years.
74 valid responses were collected over 39
days;
a 12% response rate
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What were the survey questions?
• Meetings: Considering meetings you have
attended in the last month, how many meeting
hours per week would you consider as wasted
time for you?
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Survey questions
• Does the physical arrangement of space, or
shared file areas cause you to waste time
searching?
• To what extent have health issues have
interfered with your office work?
• Is there a lack of personal motivation?
• To what extent have poor results or decisions
and/or poor work flows created wasted time on
your part?
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Distractions
• Considering the last month, how many hours per
week have you spent in activities not related to
your regular/ assigned work?
Because there are some distractions that help
productivity, we needed a second question:
• Have you had the experience of doing
something not work related, and then suddenly
finding a solution for work? Estimate how often
your ‘distractions’ in the previous question were
followed by an insight or solution.
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Messaging and searching
• In the last month, how much unproductive time
per week have you spent on emails, phone calls,
and texting?
• Considering the physical arrangement of office
space, your desk space, or shared file areas
(such as a shared computer drive or server) how
many hours per week do you spend searching?
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Work flow and results
• To what extent have poor results or decisions
and/or poor work flows created wasted time on
your part?
Most ‘Lean enterprise’ or ‘transactional
approaches’ begin and end here.
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Motivation and health
• Many forces work to hurt personal motivation:
Consider what fraction of your normal work
hours are unproductive due to such factors.
• In the last month, how many hours per week
have health issues interfered with your office
work?
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Demographic questions
• What fraction of your time is spent in an office
environment?
• Indicate your annual income
• What is your industry, highest hierarchical level
attained, and organization size
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More detail on ‘work from home’
• What percent of your office time is spent working
from home or outside the normal office?
• How productive do you see time away from the
normal office compared to working in the normal
office?
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What did we find?
Average dollar waste per person per year:
• Poor work results
$7200
• Messaging
$6500
• Distractions
$6000
• Loss of motivation $4700
• Meetings
$2800
• Searching
$2600
• Health issues
$2000
Total:
$31800
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Distributions on all categories
Results are fairly equivalent:
Boxplot of Results, Msg, Distraction , Motivation, Mtgs, Search, Health
$ 50,000
$ 40,000
Data
$ 30,000
$ 20,000
$ 10,000
$0
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Results, messaging, distractions are higher; meeting waste is low
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Waste Pareto chart
ANOVA means test of significance
comparing office waste
• Two broad groupings, large and small
Test
number
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Waste
description
health
information
meetings
motivation
distractions
messaging
Work flow
The test mean differs
from:
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Next: How do the various organization levels,
industries, and organization sizes compare?
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Fraction of pay: by organization level
A higher proportion of pay is wasted
at higher levels in the organization!
Boxplot of % of salary in waste
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% of salary in waste
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
Executive
Middle
Level
Non sup
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Fraction of pay: by organization size
Almost the same:
Boxplot of % of salary in waste
0.9
% of salary in waste
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
Large
Small to Medium
org size
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Large organizations
A finer breakdown of costs by category:
Large Org: Results, Msg, Distraction, Motivation, Mtgs, Search, Health
$ 50,000
$ 40,000
Data
$ 30,000
$ 20,000
$ 10,000
$0
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Small-to- medium organizations
A finer breakdown of costs by category:
Sm-Med Org plot: Results, Msg, Dist., Motivation, Mtgs, Search, Health
$ 50,000
$ 40,000
Data
$ 30,000
$ 20,000
$ 10,000
$0
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Category correlations
Comparing responses between categories:
meeting distraction messaging information health Motivation
distraction
0.745
messaging
0.379
0.480
information 0.350
0.441
0.581
health
0.080
0.235
0.172
0.024
motivation
0.304
0.414
0.357
0.230
0.184
Workflow
0.187
0.327
0.548
0.577
0.271 0.473
Category interrelationships
Line widths correspond to correlations
Two categories that may be related:
• High distraction and low motivation may be tied
to low engagement.
What does the result look like if we combine these
two categories?
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Distraction and motivation
Lack of engagement may be the #1 waste generator
Boxplot of engagement, results, msg meetings, search, health
$60,000
$50,000
Data
$40,000
$30,000
$20,000
$10,000
$0
Engagement
results cost
Average: $10700
messaging cost
meeting cost
searching cost
health cost
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Home office: better or worse
Part 4
Tools and techniques to
improve
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How to overcome lack
motivation?
of
Tools:
• Everyone needs to know ‘why should I care?’
– Leaders take time to explain
• Have the right measures on controllable
items
– Link metrics to actual inputs, process controls
• Performance bonuses and recognition
– Only if the reward matrix has been well designed
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How to avoid distraction
waste?
Tools:
• Adapt cubicles for people who are easily
distracted (cubicles are supposed to be
flexible)
– Higher walls, personal audio shields
• Plan alone time
– Find a culturally acceptable way to say, stay out!
• Work from home if needed
– Have a place away from your office to think
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How to address poor results?
Tools:
• Critical to customer flow-down
– linkage of measures to customer needs
• Value Stream Mapping
– Find the non-value added steps in the
workflow
• SIPOC/ measures
– Link metrics to actual inputs, process controls
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How to address messaging
waste?
Tools:
• Email rules and common sense
– Example: Don’t send it to people who don’t need
to know
• Use a call for anything needing a back and
forth dialogue
– Using the right medium for the communication
• Unsubscribe to spam, watch your filters
– Review your inbox twice a day, and only file
things that might take over 2 minutes
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How to fix bad
meetings?
Tools:
• Have names for different kinds of meetings
– Broadcast info, creative, two way
communications
– Use stand up meetings for quick work
• Prepare beforehand
– Prior agendas with estimated timing, take notes
• Follow up afterward
– Reminders on action items
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Can we improve searching
efficiency?
Tools:
• Archive useless information
– Five S in data storage
• Put what is needed on top
– Pareto principle
• Organize around needs
– Affinity analysis
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Closing
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Conclusions
1. Have a mental model that fits the work. Using a
factory model in an office environment is
awkward, and adds to the challenge of process
improvement.
2. Strategic planning is done in a cost framework,
and having a cost basis for measurement of
process improvement will help maintain acrossthe-enterprise coordination and over-time
continuity.
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Conclusions
3. Use the cost of waste based on an applicable
mental model to choose tools and approaches
for improvement.
4. Custom solutions need to be prioritized based
on the cost of waste; engagement is a high
priority
5. Use of an overall metric of waste allows the
strategic guidance of an overall program of
process improvement. Since the fraction of
waste is larger in top organizational positions,
these areas need to be included.
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References
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Bicheno, J., & Holweg, M. (2008). The Lean Toolbox (4 ed.). Buckingham, UK: PICSE Books.
Biondi, A. (1972). The creative process. Buffalo, NY: D.O.K. Publishers, Inc. Retrieved from
http://www.creativeeducationfoundation.org/
BLS. U.S. Department of Labor, Bureau of Labor Statistics. (2013). National oes data (May 2011 and 1997).
Retrieved from Division of Occupational Employment Statistics website: http://www.bls.gov/oes/tables.htm
Cutter, C. (2013, July 4). [Web log message]. Retrieved from
http://www.linkedin.com/today/post/article/20130627224702-13780238-a-harvard-economist-s-surprisingly-simpleproductivity-secret
Gouveia, A. (2012). Wasting time at work 2012. Salary.com, 1-14. Retrieved from http://www.salary.com/wastingtime-at-work-2012/
Lareau, W. (2011). Office kaisen 2: Harnessing leadership, organizations, people, and tools for office excellence.
Milwaukee, Wisconsin: ASQ Quality Press.
Leist, L. (2011). Eliminate the chaos at work: 25 techniques to increase productivity. Hoboken, NJ: John Wiley &
Sons, Inc.
Locher, D. (2012). Creating lean flow in office and service processes. Lean Enterprise Institute Knowledge Center,
Retrieved from http://www.lean.org/common/display/?o=2215
Micklewright, M. (2008, March 24). [Web log message]. Retrieved from http://www.qualitydigest.com/inside/qualityinsider-column/greatest-waste
Nicol, A. (2011, April 19). [Web log message]. Retrieved from http://www.bizwizwithin.com/2011/04/lean-in-office8-wastes.html
Sarkar, D. (2007). Lean for service organizations and offices: A holistic approach for achieving operational
excellence and improvements. Milwaukee, WI: ASQ Quality Press.
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Objectives (review)
• Fitting office Lean into the industrial Lean
paradigm is not a useful shortcut.
• Dollar measurement of waste is how to
build a long term strategic approach.
• Survey data on dollar waste in the office
environment can yield surprising results.
48
Please call or email if you have follow up questions.
Douglas C. Wood, DC Wood Consulting
Doug@DCWoodConsulting.com
Phone: (913) 669-4173
Fax:
(913) 273-1611
http://www.dcwoodconsulting.com/
A special thanks to the ASQ Quality Management Division for their support.
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