04.07.07 The 3rd Key for Adding Value to Your Business

3. Identify and Address Wasteful Activities, Processes and Items

An activity, process or item is described as ‘wastage’ if it does not add any value.

As our cosmetics business grew, we discovered that buying through intermediaries was “wastage’ since of course, it would hike prices. So, we opted to order directly from the UK. Fortunately, some vendors were kind enough to share the contact of their UK suppliers. This enabled us to position competitive prices in the market as well as expanding our product range to cater for customers' evolving demands.

Although the process of making Tyrian purple may have been the ‘in-thing’ those days, many conservationists considered it to be loaded with wastage since it would take 10,000 snails to make one gram of dye. In fact, in 2003, scientists stumbled on 300 cubic metres of sea snail shells in Southern Turkey which correspond to 60 million snails. They further suggest that such voluminous harvests could have contributed to their (snails’) extinction. Therefore, much as the ‘Tyrian purple’ business may have contributed to the business progress of Lydia and her fraternity, it was a huge cost to the ecosystem; given that no harvest control rules had been put in place at the time. And, in this modern day and age, rather than discarding those seashells, they could have been used as fillers to increase the capacity of papers in the paper industry; for cosmetics power or to reinforce materials used for manufacturing pistons, brake pads, connecting rods and other automobile parts.

A value-adding businesswoman must be ready to consistently identify and diligently eliminate wastage. ‘Wastage’ can reduce the potential of an otherwise ‘profitable value chain. Therefore, screen each activity, process or item to identify any symptoms of wastage. What adjustments can you make to reduce wastage? For example, are there any damaged products? How about services that are no longer required by users? ‘Waiting time’ plus unnecessary or unplanned downtime should be addressed and where possible, eliminated. Overproduction should be avoided as that could lead to excess inventory and storage, which could attract extra costs and also lead to spoilage. Inadequate storage or maintenance of inputs, equipment and finished products can cause spoilage; as well as purchasing items that are not durable or services whose value dwindles with time. Wastage can also occur through unutilised office space, talent or poor management of transport, time and other resources.