Kaizen. continuous improvement in the lean system

Introduction

Events are accelerating in the global economy, markets are undergoing strong and profound changes, and all this must be faced by the management of companies. Pretending to manage companies today in the same way as in the past, today is totally ineffective and inappropriate. Already in the last decades of the last century there were a large number of managers who refused to recognize the changes and act accordingly by modifying the various processes that affected the competitive response of a company.

The continuous and accelerated increase in the world population leads to great pressure in the exploitation of resources, to this is added the revolution in information systems and communications, added to all this we are spectators and participants in the globalization of the markets.

If there is another component that has exploded, it has been the continuous shortening in the life cycle of products, which leads to the products that today are successful and profitable cease to be so in ever shorter terms. High-tech companies either adjust to this new reality, or run the risk of ceasing to exist.

Within this framework, since the last decades of the twentieth century, the emergence of continuous improvement processes as a system to deal with old inefficiencies and new realities has taken place.

Today it is necessary to be competitive, and for this it is essential to achieve excellence. Continuous improvement is the way to achieve and improve the excellence and competitiveness of companies. No company can be satisfied with the achievements of the past. Every day it is necessary to accelerate the rhythms just to maintain position.

Not only are companies required to be competitive, but also societies as a whole, which requires public bodies to achieve excellence in order to promote the improvement of the societies to which they respond. Thus, quality and excellence are required in health systems, education, security, tax collection and infrastructure development. A society that is not competitive loses or generates few jobs, reduces the standard of living of its population, and continuously loses markets in the world.

Continuous improvement as a methodology aimed at a systematic improvement of performance in terms of quality, costs, speed, security and customer satisfaction is something that no organization or individual can ignore. Improvement was always necessary but never in the way it is today. In the past, the life cycles of both products and processes were long, competition was restricted both by the number of countries and companies, as well as by customs protections. Today trade barriers have fallen, the number of industrialized countries is much larger and continues to increase, and the life cycles of products and services are becoming shorter. Therefore, high quality products and services are required, low costs, speed in the design and manufacturing processes.All of this is essential to be able to compete.

Within this need for systematic improvements in the processes and results of companies and organizations, kaizen has emerged as one of the most powerful and comprehensive systems to achieve such results.

Definition of kaizen

Kaizen is both a philosophy and a system and methodology designed to continuously and systematically improve each and every one of the aspects that make up the products, services, processes and sectors of an organization.

Although kaizen is part of the ancient traditions of the Empire of the Rising Sun, it gained momentum in business activity from what was the Toyota Revolution, later known as the "just in time" production system, and currently disseminated in the West as a Lean system (Lean Office, Lean Manufacturing, Lean Construction, Lean Healthcare, Lean Six Sigma, Lean Management).

As a philosophy, kaizen represents the participatory management of all individuals in an organization aimed at achieving full customer and consumer satisfaction. We must first improve people if we want to improve processes. Quality is only possible with quality people. The objective of this is clear, to achieve the full satisfaction of customers and consumers, because without them the organization has no reason to exist.

Kaizen is not merely setting improvement goals and developing a series of steps to achieve them. Kaizen is continuous improvement within a lean production framework, implying not only improving the system and processes to achieve excellence in terms of quality, costs, delivery and safety, but also continuously improving the application of the various tools and methodologies that make it feasible.

The lean system aims at the systematic elimination of waste, through the use of a series of tools. The pillars of lean management are: continuous improvement, total quality control, elimination of waste, taking advantage of the full potential along the value chain and the participation of operators.

The essence of kaizen

Kaizen means progressive improvement that involves everyone, including both managers and workers. The kaizen philosophy assumes that our way of life, in all its aspects, deserves to be constantly improved.

In a company, each process, each activity, each product and each service must be subject to improvement. Improvements that allow to have a higher quality, and therefore fewer failures and errors, improvements in costs, and therefore be more productive and reduce the generation of waste, improvements in delivery times, safety, quality services and customer satisfaction.

fundamental concepts

To implement and manage kaizen in organizations, the following concepts should always be kept in mind:

• Maintenance and improvement Process-oriented thinking Follow the Plan / Perform / Evaluate / Act and Standardize / Perform / Evaluate / Act cycles (PREA - EREA) Give priority to quality Speak with data The next process is the customer

Maintenance and improvement

The first concern in any organization is to maintain standards, procedures and performance levels, which will serve as the basis for improvement work.

Maintenance refers to activities aimed at maintaining current technological, managerial and operational standards and upholding such standards through training and discipline. While improvement refers to those activities aimed at raising current standards. In this way, the Japanese vision of management focuses on maintaining and improving standards.

Process-oriented thinking

Only by systematically improving processes is it possible to generate better results. Focusing on improving results leaving aside the processes that generate them is absurd, however there are those who insist on this strategy.

Process-oriented thinking implies knowing in depth the various productive, administrative, commercial and logistics processes that take place in the organization, in order to detect the waste of resources and adopt measures for its elimination and prevention. Knowing the processes is what allows us to apply continuous improvement processes to them, in such a way as to make them more effective and efficient.

Follow the PREA - EREA cycles

The Plan-Perform-Evaluate-Act cycle is not only relevant to continuous improvement processes, but it should be typical of business management. Seen from the point of view of kaizen Planning implies the establishment of improvement objectives, drawing up action plans to put them into practice. Carry out refers to the implementation of what is established in the plan. Evaluate refers to determining whether the planned is being properly implemented and the expected results are being achieved. Finally Acting means adopting adjustment measures to enable a better application and achievement of results, if the planned objectives are not being achieved, or else proceed to Standardize the processes and activities in the event that the expected results are being achieved.

The Standardize-Perform-Evaluate-Act cycle focuses its attention on preserving the new processes or established working methods, to start a new cycle of improvements that will lead to better performances.

In any efficient organization, the PREA cycle must be applied within its usual management. Thus we have that the management of the company sets objectives and actions to carry them out, then an operating sector has to put this plan into practice, and we say it has because many times they do not apply it or do not execute it in the way that has been planned. As a third step, the internal audit should verify the implementation of the plan and should verify the results achieved. And we say should because there may not be control bodies or they do not proceed to carry out the corresponding evaluations. Then it is necessary to act based on what is reported by the control body. In many cases we have that the internal audit makes the evaluation and detects deviations and anomalies,informing the managers. After a while and in future audits, the same errors will continue to be detected, meaning that no action was taken after the first control and evaluation report.

Unfortunately, the aforementioned is very common in a large number of companies, which is why continuous improvement does not take place. Simply the same mistakes, bugs, waste and problems keep repeating themselves over and over again. This is where we can evaluate the quality of management and the implementation of continuous improvement.

Prioritize quality

There are several issues at stake here. The first is that many only focus on the final quality of the product or service, removing faulty products, and reprocessing those in which it is feasible. In a second instance, others aim to improve processes to achieve better products and services. But what really needs to be done is to modify the management systems to guarantee total quality. 85% of failures are not attributable to personnel but to the system, and this depends on management decisions.

A second issue is that only the quality of the products and services is addressed, leaving aside all the other processes of the organization, among which are the selection and training of personnel, the planning, programming and budgeting processes.

A third concept is to consider that higher quality leads to higher costs, when in fact higher quality in each and every one of the processes reduces waste levels and thus costs.

Quality should be yes or yes the priority, and not costs or delivery times. Poor quality ends up damaging not only the image of the company, but also profitability. Quality is not only the quality of the final product or service, but the quality of all the steps of the process in such a way that excellence can be achieved the first time. It is of little use to deliver quality products if numerous adjustments and rework are necessary to achieve this.

Talk to data

Kaizen is applied to solve problems. A problem is any deviation between what we have as a result and what we want to have. To properly understand and understand the problem, a series of data must be analyzed to support the root causes that originate the problem, the alternative solutions and the selected alternative.

Importing statistics in organizations should always be considered. Without measurements, controls are not possible, and without controls we cannot improve.

The next process is the client

The activities and processes are aimed at supplying goods or services to internal and external customers. In order to satisfy external customers, it is essential to satisfy an organization's internal customers first. Each sector in the organization must know what is required of it and with what components, personnel and input it must have in order to satisfy the requirements of its customers. Kaizen is focused on achieving the full satisfaction of internal and external customers with the least consumption of resources.

The first thing that a manager, internal auditor or consultant should do is answer questions such as:

• How well are current processes and activities maintained? Are there standards? Are they respected? Are there statistics on process costs, activity costs, product costs, service costs, sector costs, waste costs, number of accidents, quality problems, production cycle deadlines, times for tool changes, global productivity, productivity per man hours, productivity per kilowatts consumed, levels of customer and consumer satisfaction? Are improvements in results recorded in the statistics? Are the processes just in time / lean? • Are PREA - EREA cycles applied? What systems or tools are applied for quality assurance?

A manager must put kaizen into practice concentrating efforts not only on maintaining standards but also on improving them, he must seek to improve profitability by focusing on systematically improving processes, to improve processes he must follow the plan-perform-evaluate cycle -To act, you must prioritize quality over other objectives. In other words, you must improve results by improving processes and concentrating on their quality. Data must be available to assess conditions and make decisions. And each sector must provide quality products and services to both internal and external customers.

Main kaizen systems

To achieve success in the application of kaizen, various systems must be applied or put into practice, which contribute to systematically improve the results of the organization in terms of quality, costs, delivery, safety, satisfaction and profitability.

These systems are:

• Total Quality Control Just in Time Production System Total Productive Maintenance Policy Deployment Suggestion System Small Group Activity

Total Quality Control and Total Productive Maintenance make Just in Time Production feasible.

Total Quality Control

This Total Quality Control has evolved to become Total Quality Management. The objective of this system is to satisfy the needs of customers and consumers, generating products and services that meet the specifications the first time (and not after successive adjustments and reprocesses) and at the lowest cost, making use of methods and tools intended to prevent the generation of errors, and to continuously improve the performance of the processes. Everyone must be committed to quality, because the level of quality that is achieved depends on the survival of the company and with it that of the jobs of personnel and managers, and the profitability of the investment. This commitment must lead to continuous improvement of processes and products / services.Only better processes can guarantee the continuous reduction of the number of failures.

Quality should be seen as the least amount of failures not only in the final product, but in all processes and in each and every one of the components, which are those that contribute to the delivery of high quality products, with a low cost and in acceptable terms.

Just in time

The objective of Just in Time is to deliver the products demanded by customers, in the right quantities, at the right time, with the highest level of quality and the least generation of waste. The Just in Time has among its objectives to work with zero inventories, or the lowest possible inventories. This has two objectives. On the one hand, reduce the costs involved in the existence of inventories or excessive stocks, such as financial, management, insurance, losses due to obsolescence, among others. And on the other, it forces the company to produce with high quality, improve the layout, achieve multi-functionality for the workers, avoid breakdowns and minimize downtime and waiting.Excessive inventories make it possible to respond to or cover the problems caused by machines that stop working, by products with defects, by suppliers that do not meet the delivery deadlines, by the long times in the change of tools and adjustments, and by the absence of personal. In this way, the reduction of inventories makes it possible to make visible the various problems and inconveniences that afflict the company's processes, such as breakdowns, failures, waiting times, process errors, internal transport, excess movements, the lack of reliability of the providers among others.In this way, the reduction of inventories makes it possible to make visible the various problems and inconveniences that afflict the company's processes, such as breakdowns, failures, waiting times, process errors, internal transport, excess movements, the lack of reliability of the providers among others.In this way, the reduction of inventories makes it possible to make visible the various problems and inconveniences that afflict the company's processes, such as breakdowns, failures, waiting times, process errors, internal transport, excess movements, the lack of reliability of the providers among others.

Just in Time (JIT) has four essential objectives:

• Attack fundamental problems Eliminate waste Seek simplicity Design systems to identify problems

In the design of the JIT system, the minimum time necessary to produce the goods or services and the promised delivery time from the receipt of the order must always be taken into account. Based on this, the supply and inventory strategy will be determined.

A second fundamental question is to adapt the JIT system to the type of production in question. In any case, the objectives always remain valid and the need to apply the JIT system to have a fully competitive company continues to exist.

Total Productive Maintenance

Total Productive Maintenance is a series of techniques to ensure that machines and equipment in the production process are always available to perform the necessary tasks, with an optimal processing speed and without generating defects in the processing.

Reducing the cost of maintenance, reducing the level of breakdowns, achieving quality products and services, increasing the useful life of the equipment and achieving the full participation of all personnel in maintenance activities are the essential objectives of the TPM (Total Productive Maintenance).

Policy Deployment

Although the objective is to improve, improvement objectives should be set to guide, focus and coordinate the efforts of each sector and process of the organization, and between them. This is what is known as Policy Deployment.

Senior management must devise a long-term strategy, detailed in medium-term strategies and annual strategies. Management must have a plan to roll out the strategy, rolling it down to production levels. Kaizen without a goal is like taking a trip without a destination. Here is the secret of success in the application of kaizen. Improving by the mere fact of improving, or concentrating efforts in one sector as opposed to the functioning of other interrelated sectors does not lead to effective results. The organization should be focused on achieving continuous quality improvements, continuous reductions in waste, cost reductions, improvements in satisfaction levels, and shorter lead times and deliveries.

Many entrepreneurs fail not only to understand the importance and need for continuous improvement, but are also completely unaware of its implementation. Unfortunately, they believe that continuous improvement is merely about group work, creativity, process analysis and proposals for improvements with their corresponding start-up. Continuous improvement from the kaizen perspective implies having statistics on the operation and achievements of the various processes, setting improvement objectives, coordination of efforts, staff awareness, analysis of the different types of waste, and a Lean vision of the processes.

Suggestion systems

Although the stated purpose of any suggestion system is to elevate the ideas of all employees to improve company operations, processes, products and services, its fundamental purpose is to raise staff morale. In order to make the improvements in its application feasible, it is critical to have motivated personnel, and in this the suggestion systems fulfill their central objective.

Comfort and safety have a central focus as worker goals. Which does not detract from the importance of the suggestions aimed at improving costs and quality.

Small group activity

These activities are generally carried out by groups of a maximum number of 7 people, with an internal leader who makes up the group and a facilitator external to the group who performs support tasks. Membership in these groups is considered voluntary, but we cannot aspire to have a competitive company if our adversaries have this type of activity and our company does not. Among the best known are the Quality Control Circles. The groups can be made up of personnel from the same sector or from different sectors and the same process, or from different processes.

The improvements will be devised by managerial, technical or line personnel, and their implementation must have the full support of the personnel involved.

Coordinating the systems

Therefore, it is necessary to have quality management and excellent maintenance work to make the Just in Time system feasible, in order to achieve the optimum quality of processes and products, and high operational efficiency of the equipment. This quality and maintenance must be continuously improved through the Plan-Perform-Evaluate-Act cycles.

The achievement of the improvements should be set as objectives by the Management, with specific deadlines.

Once the objectives and the deadlines for their realization have been set, the tasks of the different improvement teams come into play, whether they are improvements in terms of deadlines, costs or quality. Also counting on personal suggestion systems as a support element for the overall improvement of the system.

We must never lose sight of the fact that this type of management and improvement is not only applicable to product processing tasks, but also to administrative processes, sales processes, and not only in industrial activities but also in services..

The three mainstays of kaizen

Kaizen should aim to achieve a high level in the Five S, eliminate and prevent waste (dumbs), and maintain and improve standards. Continuous improvement in each of these props will allow the company to have the ability to have the foundations to be able to compete in current markets.

A company lacking in discipline, disorganized and without order, with deficiencies in terms of neatness, with high waste and without operating standards subject to maintenance and improvement, cannot be competitive.

The Five S

This system owes its name to the five steps whose names in Japanese begin with the letter S, and which are:

1. Seiri (Organization) Seiton (Order) Seiso (Cleanliness) Seiketshu (Standardized Cleanliness) Sitshuke (Discipline)

Why are the Five S so important? It is the first thing that executives, managers and middle managers usually ask in relation to the implementation of this system. The answer says that the application, maintenance and improvement of organization, order, cleanliness, standards and discipline is critical to achieve high levels of quality, maintenance, and high profitability. Companies where disorganization, disorder and dirt stand out on all sides are inept in order to compete in a global economy, since they are difficult to visually control their processes, they have high levels of inventories in process and waste, they have high levels of insecurity and high risk of accidents, have high levels of breakdowns in machines and equipment, quality and productivity is low,staff motivation levels are low, and costs are high.

It is typical of companies that do not practice the Five S, or do not do it properly, to have:

• Long response times (between the requirement and its satisfaction) High levels of products in process Difficulties finding tools Long tool change times or machine adjustments Very dirty work sites, which make them dangerous to health of personnel, cause numerous breakdowns, and the quality of products or services is low Problems in the movement of people, supplies and tools through the corridors of the plants Excessive surface area for the production and storage of materials Levels very low motivation and job satisfaction.

The Five S are not only for industrial plants but for any type of activity, and whatever the area of ​​the company. Disorganization, disorder and lack of cleanliness is not something that only occurs in the production plant, they also take place in offices, in sales sectors, in hospitals, in financial institutions, and in agencies government among others.

To a great extent, disorganization and disorder not only generate waste (mutas) but also hide it. That is why the implementation of this system is so important. The lack of organization, order and cleanliness threatens the profitability levels of the company.

Seiri - Organization

The five S's are not only objectives to be achieved, but they have an order in their application. It is not a question of saying we have cleaning in the plant but we have not yet removed these machines that we do not need. Of course, once the Five S's are implemented, it can occur over time to have organization and cleanliness, but lack order, or to have cleanliness and order but have new unnecessary elements that have accumulated.

The first S corresponds to Seiri (Organization) which responds to the Just in Time principle of having only what is needed, in the amount that is needed, and only when it is needed. Organizing involves removing from workstations, or work areas, all items that are not required for current production, office, or sales operations.

The implementation of the Organization creates a work environment in which space, time, money, energy, and other resources can be managed and used more effectively. When the Organization is well established, problems and annoyances in the work flow are reduced, communication between workers is improved, the quality of the product or services is increased, and productivity is increased.

When a company lacks an Organization, problems arise such as:

1. The factory tends to be increasingly cluttered making work difficult Shelves, drawers and cabinets for storing unnecessary things form fences between employees, making communication difficult Time is wasted looking for parts and tools in workshops and factories, or forms, reports or data in offices. It is costly to maintain unnecessary stocks and machines. Excess stocks and inventories tend to hide other types of production problems. Unnecessary equipment and elements make it difficult to improve the production flow.

Seiton - Order

The Order can be put into practice once the Organization phase has been completed. First we must remove what is not necessary and then properly order each component and element.

Ordering involves ordering the necessary items so that they are user friendly and labeling them so that anyone can find it and take it for use. Order is extremely important because it helps to eliminate many types of waste both in the production area and in the office area.

When a company lacks Order, problems arise such as:

1. Excessive amount of work time dedicated to searching for lost or misplaced tools, components or supplies. Waste due to waiting times due to not finding the necessary tools and in the state they should have for immediate use. of Order facilitates the commission of theft or fraud Excessive inventories and stocks are generated An excess of office supplies and production tools accumulate It hinders the movement of people, such as the transfer of supplies and components Increases risks of accidents It makes it difficult or slows down the changes of tools Unnecessary and exhausting movements on the part of the operators Lack of an adequate work flow Use of excessive physical space.

Seiso - Cleaning

It involves keeping everything clean and suitable for immediate use. One of the purposes of Housekeeping is to turn the work station or office into a clean, polished place where everyone can work at ease. Another key purpose is to keep everything in tip-top condition so that when someone needs to use something it is ready to go.

When a company lacks Cleaning, problems arise such as:

1. Defects are less obvious in messy, dirty factories Puddles of oil and water cause slips and accidents Machines do not get enough maintenance checks and tend to break down frequently Cutting filings can get mixed up in production and assembly processes with The result of defects It hinders both the good aeration and the correct lighting of the places They affect the morale of the workers It prevents having elements available for immediate use.

Seiketshu - Standardized Cleaning

Standardized Cleanliness can be defined as the state existing when Organization, Order and Cleanliness are properly maintained. It is useless to implement Organization, Order and Cleanliness if conditions constantly deteriorate to the level prior to implementation.

It is not about staff stopping work half an hour before departure to start putting everything in its place and cleaning the places, or that someone dedicates at the end of the day to order and clean the workstations. It is about continually keeping workplaces orderly and clean.

Sitshuke - Discipline

It involves having the habit of correctly maintaining proper procedures.

When discipline is lacking, unnecessary elements begin to accumulate as soon as the implementation of the Organization is completed; tools and templates are not returned to designated locations after use; even if the equipment gets dirty, little or nothing is done to clean it; dirty or poorly lubricated machines start to malfunction and produce faulty items; Dirty, poorly lit and disorganized workplaces lower employee morale. Given the consequences, Discipline is important because without it, the implementation of the first four S's rapidly deteriorates.

Conclusions on the Five S's

The application of the Five S is not only necessary to make a Just in Time system feasible, but also leads to the application of kaizen, in such a way as to constantly improve the results generated by the Five S.

A simple vision of the companies in their sectors and processes in terms of the organization, order and cleanliness in them existing are a clear sample and anticipation of the quality of the services and products generated, as well as the levels of waste and degrees of competitiveness that they possess.

Kaizen must contribute to the implementation and improvement of the Five S, and use them to improve quality, costs, productivity, and satisfaction levels.

Elimination and prevention of waste

Mute is the Japanese word for waste. In its classic and original version, the muda refers to any activity that does not add value. In the next step they classify the seven classic changes as:

1. Overproduction move Inventory move Defective product rejection / repair move Move move Processing move Hold move Shipment move

This classic version of the mudas focuses on industrial and office processes, considering as such those processes that do not generate value, such as transport, inspection, movements, unnecessary processing, and tasks that generate defective products, or to be performed to repair faulty products. Excess inventories and overproduction are not only seen as the unnecessary expenses that they cause, but as a way to save the inconvenience caused by production defects, equipment breakdowns, lack of supplies and long waiting times.

However, not only the manufacturing processes generate changes, but also the processes related to credit management, as well as financial and sales management.

In the same way that an inventory of inputs or finished products generates financial costs, maintenance costs, losses due to obsolescence, and use of physical space, among others, excesses of fixed assets also generate high financial, maintenance and obsolescence costs, apart of the physical space they make use of.

In the same way that a production process can generate products with failures, a credit process can generate bad debts and bad debts. After all, it is no use producing faultless goods for which we can never charge.

For these reasons, when computing waste, the classification is broader than the traditional one, and it also requires the application of kaizen for continuous improvement. Not only is continuous improvement necessary to reduce production costs and quality improvement, but also to reduce bad debt and delinquency levels.

Waste or waste can be defined as the consumption of resources that do not generate added value for the company, customers and / or consumers.

Concentrating on the company, waste involves consumed resources that prevent achieving better results, whether it is greater profits or less losses. Anything that does not contribute to profitability should be considered waste.

Thus we can affirm that waste is everything that is not absolutely necessary for the production of goods and the provision of services by the company.

There is waste of many kinds in the world. People waste time, space, buildings, products, money, among other things. Naturally, we can expect waste to exist in companies in many ways. When the waste is bad enough, the waste is no longer something that is present in the company, but it is the company that is fully in the waste. And we refer to companies because we refer to both industrial activities, as well as services, construction, mining and agricultural activities, among others.

If we have a barrel and inside there is a liquid called a resource, each hole that makes us lose part of the resource is the equivalent of a waste factor, that is, a failure in management through which part is lost or squandered. of our resources.

The detection, elimination and prevention of waste helps to optimize the use of resources. Optimizing something is achieving the maximum objectives with the minimum effort.

New list of changes

1. Mute due to lack of focus Mute due to overproduction Mute due to excess inventories Mute due to excess of fixed assets in quantity and capacity Mute due to excess personnel Mute due to breakdowns Mute due to accidents Mute due to contamination Mute due to high staff turnover Mute due to high customer turnover Mute due to late payment and uncollectible trade losses Sales Mute due to occupational diseases and accidents Mute due to failures and defects in products or services Mute due to inefficient processes Mute due to inefficient designs of products or services Mute due to erroneous or out-of-time information Mute due to quality of materials and supplies Mute due to unacceptable quality of machinery and tools Mute due to failure in the quality of the staff Mute due to internal transport Mute due to waiting times Mute due to excessive movements Excessive bureaucracy Mute due toWaste of energy Change due to variations in exchange rates, interest rates and prices of raw materials Change due to fraud Change due to serious lack of controls Change due to lack of insurance Change due to lack or defects in contingency plans

Conclusions on the detection, elimination and prevention of waste

If we want to improve the profits and profitability of the company, it is essential to combat these sources of loss. If it is a non-profit organization such as a public body, combating waste implies being able to provide more and better services with fewer resources.

The fight against waste is critical and fundamental, much more in a time where there is great pressure on natural resources. Faced with this pressure, the costs of raw materials and energy increase, the best way to be highly competitive is to make the best use of these resources.

Maintain and improve standards

Standards represent the best, easiest and safest way to do a job, offering the best way to preserve know-how and experience. With established standards, managers can evaluate job performance. Without standards, there is no proper way to do it.

Standards provide a means to avoid recurrence of errors and reduce levels of variability, also creating a basis for auditing and diagnosing compliance with established work guidelines.

Standardization is one of the best kept secrets of Japanese industrial success, a hidden gem for high quality production with low cost and fast delivery. In an age of continuous improvement, six sigma, zero defects, and ISO 9000, competitive quality, low cost, and fast delivery are not options but customer requirements. It is truly impossible to establish or achieve excellence goals in quality, cost and delivery without standardization. Standardization is truly the linchpin of continuous improvement, without it the best efforts will be only temporary or incomplete.

Improvement is inseparable from standardization. At a basic level, standardization is the culmination of the PREA (Plan-Perform-Evaluate-Act) improvement cycle. The operation or system is analyzed and a better way of doing the work is developed, the results are verified, putting into practice the means that ensure that the work is always done as planned, be it the case of a veteran worker or a newcomer. From a higher perspective, a company can improve the way it performs standardization itself.

Definition of standards

They are written and graphic descriptions that help us understand the most authoritative and reliable techniques of a factory, office or service entity, and provide us with knowledge on various topics related to production (people, machines, materials, methods, measurements, and information), with the intention of generating products and services reliably, securely, cheaply, and quickly.

The goal of “generating quality products and services reliably, easily, safely, cheaply and quickly” is included to highlight the goal-oriented nature of standardization. The “skills and knowledge” aspect of the definition refers to the criteria and procedures for doing things or providing services. These criteria and procedures are practiced and refined until they are authorized within the company. The part on “written and graphic descriptions that facilitate understanding” emphasizes that the standards must be clear and easy to understand to ensure that they are applied correctly.

Importance of standards

The standardization of the various processes allows:

• Obtain high-quality, low-cost products and services on a regular basis Achieve repetitive products and services with the same characteristics Train the company's staff in how to carry out the work Conducting audits to verify compliance with standards To have a base on which to make improvements in the performance of the processes Consolidate the improvements obtained in the continuous improvement cycles.

Conclusions

It is not necessary to reach high degrees of bureaucratization to achieve optimal standardization of processes, it is only necessary to apply creativity to generate through graphics and diagrams the way to carry out the tasks, and what components or inputs to use to develop them.

Many organizations have implicit standards, that is, those methods that are repeated over and over again but are not documented. The problem with applying this work methodology is depending on the skills of certain people to carry out the tasks. On the other hand, this is only admissible in activities and processes with a high degree of simplicity. But modern and complex industrial and services require the explicit standardization of processes.

How to guarantee levels of quality and costs when the steps to make it feasible are not expressly specified?

Kaizen in practice

A company or organization cannot do without continuous improvement, both in the products and services offered, as well as in the internal processes, these correspond to production, sales, credits and collections, treasury, purchases, contracting and training. of personnel, and accounting among others. Continuous improvement pursues improvement in quality, reduction in costs, and improvement in deliveries. A company that does not improve in a world of high competition is marginalized from the markets.

These improvements are not only pertinent, as expressed before, to products and services, or to production processes, but to each and every one of the company's processes. It is not only important to have quality products, but to meet the delivery deadlines and bill them properly.

No company, whatever the activity, and whatever its size, can put aside the need to apply continuous improvement. Government entities are quite elusive in applying these methodologies, but the need to provide more services every day with the same or fewer resources forces them to reconsider the imperative need for their application.

Is there any activity that does not record some type of waste, and therefore is exempt from improvement? Any activity can be improved to save resources, prevent losses, save costs, and improve both product and service quality.

Larger companies have more extensive resources to deal with the implementation of kaizen. Also certain corporate or social cultures facilitate its implementation. But neither size nor social culture are excuses for not applying continuous improvement, or for combating waste. Whatever the culture, and whatever its size, a company must improve to satisfy and retain its customers and consumers, and therefore to maintain jobs and invested capital.

No organization, whatever its size and activity, is prevented from:

• Make managers and staff aware of the need to continually improve the company's processes, products, and services Make a diagnosis of the company's competitiveness level Train staff on kaizen and the various tools, methods and systems that allow improve the quality, productivity, costs, services, safety and profitability of the company Detect and quantify the waste produced in the company Adopt measures for the elimination and prevention of different types of waste Apply the Five S. Implement statistics applied to businesses Establish suggestion systems Establish group activities for the implementation of tools, methods and systems conducive to the application of Just in Time, and its continuous improvement.Periodically audit the processes and results from a kaizen perspective.

conclusion

On the one hand, we have that every company is always with real problems that it must solve, and these problems are taken as a blessing by kaizen, since they constitute a trigger for the action of managers and personnel.

On the other hand, a company is subject to the imperative need to improve both its processes and its products and services, in order to continue facing the competition.

A company or organization that constantly repeats the same mistakes means that it does not learn from them and lacks the aptitude to overcome them. Likewise, a company that does not improve its products, services, and processes lacks the ability to set improvement targets and achieve them over time.

Today it is still common in the world companies with high levels of waste, which in many cases represent up to 30% of the total invoiced, that is nothing less than 25% of the annual turnover. Many tend to deny this reality, others say that it cannot be feasible. However, it is a reality. After all, it is the sum of competitive or uncompetitive companies that makes a country have better or worse levels of quality of life for its inhabitants.

The big difference is between making quality and productivity only the object of contentless speeches, or making them a reality through education, science and technology, and the promotion of savings and investment.

Annex - Expanded Classification of Mudas

1. Lack of focus

The Sun is a powerful source of energy. Every hour the Sun bathes the Earth with billions of kilowatts. But with a hat and a good sunscreen, a person can sunbathe for several hours with few negative effects.

A laser is a weak source of energy. A laser requires a few kilowatts of energy and converts them into a coherent beam of light. But with a laser it is possible to cut steel and remove a malignant tumor.

When a company is focused, it creates the same effect. Create a powerful, laser-like ability to dominate the market. That's what being focused is about. When a company goes out of focus, it loses its power. It becomes a sun that dissipates its energy in too many products, too many markets.

A company cannot expand its product lines to infinity. Sooner or later it reaches a point of diminishing return. It loses its efficiency, its competitiveness, and worst of all, its ability to manage a heterogeneous bunch of unrelated products and services.

This is not only a problem for large companies, it also hurts small and medium-sized companies. It was seen in companies like IBM that produced everything from large computers to personal computers, software, and computer consulting. This is no longer the case, IBM has dismembered and is far from being what it was thirty years ago. But this can be seen even in a professional service. New services and more personnel begin to add to attend to the new benefits. As the spectrum of services increases, control over the quality of services, over the consumption of resources, over the contracted personnel is lost. Soon there are more losses and headaches, than what you gain from your new activities.

Two rules to keep in mind. Given a certain structure, any increase in products and services leads to a maximum gain at first, and then these begin to decrease as a result of the loss of focus. Second rule. Even increasing the structural capacity, the effects of a continuous blurring will be negative as a result of the loss of management and control capacity.

Loss of focus is the basis for the loss of efficiency and generation of waste and unproductiveness that occur in the waste that is detailed below.

The 80/20 rule helps us to duly consider which are the vital few and which are the trivial many. In other words, those few activities in which the benefits are concentrated, and those that increase the complexity of the management and reduce profitability (a large number of activities that generate a minimum of benefits and even reduce the total benefit). The activity-based costing doctrine has highlighted this issue and made it clear that the measurement of most companies is distorted. The result is that companies make a profit on a relatively small part of what they do and then reduce that profit on almost everything else they do. These measurement deficiencies run counter to strategy.With a flawed measurement system, you think you are improving profitability by expanding your product and service line and "spreading the overhead." An accurate measurement system would reveal that the company derives most of its benefit from those product areas where it really differs, and that expanding the strategy would actually reduce rather than increase profits. Current Measurement Systems Are Against Electionsinstead of increasing them. Current Measurement Systems Are Against Electionsinstead of increasing them. Current Measurement Systems Are Against Elections

2. Overproduction

It can be defined as producing what is unnecessary, when it is unnecessary and in unnecessary quantities. It constitutes one of the worst wastes. It is worth asking about the reason for overproduction, and the answer is simple: the existence of machines and workers with excess capacity. In this way, in order not to decrease operating rates, excess capacity is used to manufacture products in excess.

Said overproduction can be intermediate or final products. This overproduction generates higher storage costs in terms of physical space, personnel, administrative controls, use of machines for internal transport, insurance, financial cost, and losses due to obsolescence, among others.

Many times this overproduction helps to cover internal inefficiencies. The reasoning is "if 10% of the faulty components are produced and 100 are required for the next process, then 111 units are produced in such a way that discounting the 11 defective units we can have the 100 required". In this there are wasted materials and labor hours, and wasted supplies and labor in reprocessing work if this is feasible.

It is also necessary to point out within this type of waste the overproduction of printed reports. It is quite normal the uncontrolled printing of unnecessary information, not used by the sectors to which they are directed, or the multiplicity of impressions for different sectors. In this we have the cost of stationery, cost of inks, amortization and maintenance of printers, personnel in charge of their care and subsequent distribution.

3. Excess inventories

It includes not only warehouse inventory, but also inventory related to all in-process stock. This means materials, assembled parts, and any items stacked at retention points located at or between process stations. Inventories are sometimes accumulated as stocks of finished products and other times as inventories in process.

In marketing companies this excess is due to the excess of resale products, and in services companies it is due to spare parts, supplies and different types of materials that exceed the immediate demand for said elements or components.

The reasons that generate such excess inventories are several. First, try to take advantage of special prices for purchasing volumes. Second, take inventory of possible cost increases. Third, overcome the problems caused by the deficiency of internal processes, such as quality problems, lack of coordination in the speed of processes, batch production, long tool replacement times or preparation times, organization of production by processes or functions, shortcomings in the projection of future demand. Fourth, shortcomings or doubts about the delivery time, the quantity delivered and the quality of it by the suppliers.

This excess inventory generates huge costs. On the one hand, the costs it generates reduce profits or contribute to the generation of losses, and on the other hand, it greatly increases assets, thereby reducing profitability on assets.

Among the costs generated by excessive inventory we have:

1. Financial costs. If you have debts with financial entities, the cost is the interest that must be paid unnecessarily to these institutions. If there are no financial debts, the cost corresponds to not using capital to generate financial income instead of being used to finance assets in stock. Opportunity cost. Many businesses cannot be carried out due to lack of funds when they have the same invested in stock. Maintenance. Labor, more physical space (rents paid by warehouses or warehouses, or rents that are no longer perceived because the warehouses have excessive stock). To the labor and physical space, general expenses such as electricity, depreciation, among others, insurance costs on stock, losses due to obsolescence or expiration must be added.Examples of obsolescence are the microprocessors of a certain power replaced by new and more powerful microprocessors. Regarding expiration, classic examples are medicines and food. Quality losses due to failures generated in the excessive manipulation of goods. Administration and inventory control costs. Custody and custody costs.

4. Excess of fixed assets in quantity and capacity

In the case of machines, tools, wheels, furniture and real estate, the excess in both quantity and capacity generates high costs. Maintenance, amortization, insurance, financial, security and opportunity costs, among others.

Just as having more stock than necessary leads to having funds dedicated to an asset that does not generate profits, the excess of fixed assets in both quantity and capacity implies incurring unnecessary costs.

What leads companies to own more fixed assets than necessary in quantity or capacity? There are numerous reasons, among them being carried away by the latest technology, wanting to have or have the latest in machines, wheels or computers. The obsession with hoarding assets that demonstrate economic power. The acquisition of high-speed machines that have higher processing capacities than those required by article demands or that exceed the needs of a production line.

5. Overstaffing

It is worth asking about what are the reasons that generate excess personnel in companies. The reasons are several and all have a high impact on the results.

• Excessive organizational levels. Functions not clearly defined. Inefficient work methods. Failures in layout design. Excessive bureaucratic tasks. Excessive internal transport. High levels of disorganization, disorder and lack of cleanliness. Low level of polyfunctionality of personnel. Inspection of reception of materials and supplies, in terms of quality and quantity. Issues to inventory the stock of materials, products in process and finished. High staff turnover. Tendency to increase the size of the bureaucratic sectors to increase power and income of those who run them. In bureaucratic sectors, bad information systems.

Regarding the low level of polyfunctionality of the personnel, we refer to the existence of jobs with specialists by functions, which leads to having personnel for each type of work or process. So we have a tooling specialist, another in welding, another in machining. If there are 6 processes, we will have at least six people to attend to them. If production falls in half, we will continue with these six operators. In a company with a high level of polyfunctionality, the staff knows how to handle various processes, so in the factory to which we referred, the lower production can be attended by two workers instead of six.

When suppliers are selected based on the price of their inputs and not the total price, which is made up of the price of the input but also by its quality, by punctual deliveries and the quantity required, and by the non-need of physical inspections upon receipt. Not properly selecting suppliers and not having a high-level supply system organized with them leads to the costs of having personnel dedicated exclusively to control each receipt of materials and supplies, verify that the components are requested, perform the count and verify the quality of the material received. There are companies that receive in due time and form the inputs requested directly at the respective work station,with all that it means in savings including internal storage and transportation.

Having excess stock is not only a source of financial costs, but also of personnel for the care and handling of them, and the cost of personnel assigned to control such inventories.

The excess of personnel not only generates the salary cost, but also the cost of the physical space occupied, the cost of supplying them with fixed assets, plus all the other services of the company that they make use of.

6. Faults

The lack of operation, the operation with small stops, the lack of speed and the generation of defective products or services are all generators of waste. Lack of proper maintenance not only leads to the generation of excessive repair costs, but also to the loss of hours of productive work, the lack of compliance with customers (unless there is a significant stock of finished products to deal with such orders), cost of materials and products to be discarded, and the costs of reprocessing, when these are feasible or possible to carry out.

Not less are the risks involved in accidents related to breakdowns, which can affect both people and assets of the company, as well as external to it. In this sense we have from the breakdowns suffered by medical instruments, to the one that takes place in power generators in electricity companies, or those that take place in airplanes, trains, ships, trucks, or transmission antennas.

7. Accidents

Depending on the characteristics and magnitudes, they can even lead to a stoppage in the company's operations. They are often related to losses due to breakdowns and the lack of good maintenance management.

Accidents generate losses. Therefore, we must relieve and evaluate the risks and adopt precautionary measures to prevent them from occurring and plan preventively the actions to be carried out if they occur.

Although insurance can cover the effects of an accident, the bad press that it generates cannot be covered by a policy. Imagine a passenger transport company that regularly has accidents that cause deaths and injuries, insurance may cover this, but the loss in the sale of tickets cannot be covered.

8. Pollution

Both the productive processes of goods and services and goods and services must be of such characteristics that they do not generate processes that are harmful to the environment, human health and ecological balance.

Many countries have very strict legislation and controls regarding these factors, therefore a company must take measures to avoid incurring contamination that will bring loss of resources as well as very bad press.

From the emission of gases, to the overturning of polluted waters, through products harmful to health and the environment, are critical factors.

In many countries, companies must pay a fee for the amount of polluting gases or liquids. Therefore, improving the operation of machines, making processes more efficient and conveniently monitoring their operation is essential in reducing such costs.

9. High staff turnover

Every company undergoes staff turnover, but when it exceeds certain levels it generates significant drops in both the quality and productivity of benefits. The experience of the personnel is an asset of importance for the company, its loss implies a drop in productivity, to a greater or lesser extent, depending on the type of activity.

Staff turnover leads to personnel search and hiring costs, training costs, and losses incurred until staff gain sufficient experience and knowledge of activities and processes.

We must calculate the turnover of the company in general and by sector, analyze the causes, see its evolution over time and compare it with other companies in the same activity. We must assess the degree to which this rotation affects the quality, productivity, and costs of the goods and services produced, and how it can be prevented or corrected.

10. High customer turnover

A customer is an asset, an asset that has a cost. It is the cost incurred in obtaining it. Losing it implies losing much more than what was invested in achieving it, but also the entire stream of updated benefits that are no longer perceived or obtained.

Permanent monitoring of the client portfolio is crucial. Many companies do not, it seems unaware that the cost of keeping a customer is several times less than getting a new one.

A few years ago, a consultant brought in a videotape that he had been commissioned to show to the CEO of a scientific equipment manufacturing company. On the screen appeared the face of the president of one of the manufacturer's biggest customers, who, leaning over to the camera, whispered through clenched teeth: "I hate you." A similar sentiment was recently expressed towards the management team of a major telecommunications equipment manufacturer by one of the senior executives of one of its main clients: “Even if you gave us your products for free, we could not afford to work with you”.

What had sparked the anger of these customers, and countless others in all sectors, had nothing to do with the products, their characteristics, qualities or prices. Suppliers' products were up-to-date, well-made, and reasonably priced. In contrast, the huge customer dissatisfaction had everything to do with the fact that doing business with those two companies was overwhelmingly complex, troublesome and exhausting. These two companies we were talking about presented their customers with a description of their products so obscure that the customers had to put in a lot of effort to determine what exactly they should buy; its opaque procedure for ordering, so that buyers had to spend a great deal of time specifying what they wanted;their delivery process was so prone to errors that customers were forced to check all shipments and return many of them; her accounting system generated invoices so convoluted that it required a lot of patience to decipher them; and the main task of their "customer service" units, it seems, was to answer the customer's call, confess to being unable to solve the problem, and pass the communication on to another, even more useless, employee. Those companies were definitely not companies that were easy to work with.and the main task of their "customer service" units, it seems, was to answer the customer's call, confess to being unable to solve the problem, and pass the communication on to another, even more useless, employee. Those companies were definitely not companies that were easy to work with.and the main task of their "customer service" units, it seems, was to answer the customer's call, confess to being unable to solve the problem, and pass the communication on to another, even more useless, employee. Those companies were definitely not companies that were easy to work with.

A company that is easy to work with, means that, from the customer's point of view, interacting with it requires the least possible cost and effort. It means that the company accepts orders placed at the time and by the most comfortable means for the customer; It means that the orders are expressed in the terminology of the buyer, and not in the twisted nomenclature of the company. It means that it makes it difficult for the customer to check the status of his order; that eliminates the endless series of useless phone calls to officials who have no information or interest, and who have been trained only to pass the call on to some other equally ignorant official. It means that the company issues a single invoice that is written in understandable terms,and not with the hidden codes of the company itself, or in its internal references, and which since its inception has been designed so that the client can understand and use it; in short: an invoice that can be deciphered by someone who is not an expert hieroglyph analyst.

The importance of becoming a company with which it is easy to work derives from the principle that says: "The price of the product is only part of the cost of the customer." The check that he sends us is not the total cost he incurs for working with our company, there are other costs. The customer must also interact with our sales representatives, formulate an order, receive it, check it and store the merchandise; receive and interpret our invoice, pay it, return products that are not in good condition, and other tasks. All these tasks cost the customer money, and not everything goes to our Caja. In some cases, the overall costs of working with a company are almost as high as what the customer has actually paid for the order.

If the company's ordering procedure is opaque, the customer will have to waste time and money trying to translate it. If the company doesn't offer customers an easy way to check order status, they'll have to make their way through exasperating phone calls to answering machines whose recorded voice offers no information. If the delivery system is fickle and unreliable, the customer will have to waste time and money in devising how to cover the company's banalities. If the invoice sent to the client is difficult to understand, the client will have to waste his time clarifying the situation with the staff of the company's billing department.

If the way of working of the company has been designed for their own comfort and security, and not for the comfort and security of their clients, they must suffer the consequences; and in the long term, the company will also accuse them. The more difficult it is to work with a company, the greater the burden and costs it imposes on its clients and, of course, the less competitive that company will be. Lowering prices based on reducing the margin is a way for the company to differentiate itself from its competitors; but it is not the most desirable way.

11. Bad debts and uncollectible

A business cycle does not end with the sale, but with its effective collection. What is the use of producing quality goods and services, selling them, delivering them in a timely manner, and providing excellent services, if we cannot finish the operation with the collection. Both late payment and bad debts are factors that afflict and can end up jeopardizing the continuity of the company, especially in times of crisis.

In the same way that an excess of stock of materials or finished products, or an excess of fixed assets, generates higher costs and less profitability, delinquencies can produce equal damage.

Does your company have a permanent monitoring system and through the use of computer systems? Or do you do it manually?

12. Loss of sales

They are caused by a number of reasons to which many small businessmen tend to give it. From the lack of stock, through the poor quality of products or services, problems in post sales services, problems in billing, inconvenience or lack of consideration for customer complaints, not responding in time to requests of products or services, and poor telephone service, are a sample of the main reasons why customers can withdraw from an organization or the reason why orders for goods or services are canceled.

On the one hand, we have incomes that are not received, and on the other hand, innumerable expenses that have been incurred to generate sales that are deranged due to the lack of appropriate and effective response by the organization. Imagine sales representatives touring a vast region with all that this implies in terms of expenses and then due to lack of stock, inability to give a quick response, poor quality customer service or product failures such sales fail to be made reality. An example would be the thousand Euros that were no longer sold, but also the 200 Euros that were spent on advertising or the 3000 Euros that we spent with the representative.

Does the organization have statistics on these problems and inconveniences? Do you evaluate their economic effect? Is work being carried out to identify the causes and to solve and prevent them? Do you measure customer satisfaction levels? Are there statistics in the company that can be consulted? Are these problems and their solutions discussed at Committee meetings?

13. Work-related illnesses and accidents

They help reduce productivity levels, increase costs, reduce employee satisfaction with the company, and increase employee turnover. New employees with less knowledge and experience, leads to decreased productivity and increased costs.

The sole concern about diseases and accidents decreases the concentration of workers in their daily work, affecting the levels of productivity and quality in the processes.

14. Failures and defects in products or services

Disposable products and materials, reprocessing costs, lack of term deliveries, loss of customer and user confidence, repair costs and guarantees are some of the wastes that will be incurred by companies that cannot guarantee high levels of product quality. and services.

Today, a company that registers 66,807 defects per million opportunities (which is equivalent to a 3 sigma quality level) has a non-quality cost percentage with respect to sales volume of 22 to 32%. While a company with 6,210 defects per million opportunities (4 sigma) has a non-quality cost percentage with respect to sales volume of 15 to 20%.

15. Inefficient processes

Improper technology or design leads to waste in the processing work itself. Improperly distant access or excessive machine processing, unproductive press actuation, and removal of chips remaining when drilling a sheet are all examples of avoidable processing waste. At each step a workpiece or piece of information is worked, value is added and then sent to the next process. In this case, processing refers to modifying this type of work piece or information item. Frequently, processing waste removal can be accomplished with a low-cost, common sense technique. By combining operations some wasteful processing can be avoided.

The waste in processing also occurs, in many cases, as a result of a lack of synchronization of processes. Operators often try to be involved in the processing work to a much greater degree than necessary, which is another example of processing waste.

They are usually observed when analyzing the manufacturing processes the existence of unnecessary activities, others that are not carried out in the most convenient place, the person who performs it is not the most suitable for it, the moment is not indicated, or they could be combined with other tasks, or be simplified.

16. Inefficient product or service designs

Value analysis helps us detect those components of the product or service not valued by consumers. It is also necessary to detect all those formats or characteristics that increase costs, and that can be replaced by others of lower cost. Or find new ways, depending on new technologies, to provide the same or better features at lower costs.

It is very important to be able to reduce the number of components that make up a product, including being able to reduce the total number of components or supplies that a company manages. This will generate lower costs of acquisition, transportation, storage, and internal management of supplies.

17. Erroneous information or out of term

Being able to make decisions requires correct information and at the appropriate time. In a production process, not having reliable information that tells us what to produce, in what quantity to produce it, and at what moment to do so, largely determines the success or failure of the operations.

Similarly, information must be available on costs and their variations, as well as on faults or defects with their frequency, severity, volume and monetary importance.

Process management requires both internal and external information, reliable and at the appropriate time.

The quality and timeliness of the information is crucial when it comes to controlling, analyzing, improving and making decisions. The information is directly related to each and every other waste that is reported here. But it is also vital for financial, strategic, commercial and operational decision-making.

18. Quality of materials and supplies

Good purchasing management and supplier relationships allow the company to reduce inspection costs (both physical units received, and quality), stock maintenance costs, financial costs due to the resources invested in stock, and administration costs.

The quality assurance of materials and supplies allows the company to acquire and receive them "just in time", reducing processing costs and allowing for agile and safe manufacturing.

19. Quality of machinery and tools

On the one hand we have the good maintenance of fixed assets, but on the other hand there is the quality of them to carry out effectively and efficiently the various services for which they were purchased.

Just as the quality of materials and personnel are important aspects when producing goods and services, so is the quality of machinery, equipment, tools and instruments.

Quality is decisive when it comes to generating better production, having easier use and maintenance of them, and a longer duration. This quality above all things must be appropriate to the use to which it will be put.

20. Quality of human resources

It is impossible to achieve high levels of productivity or quality without first having quality staff. We call as quality personnel those who have the necessary skills and attitudes to carry out a process correctly, whether it is a production, service or management process.

If staff do not have the necessary experience, knowledge, or skills to properly perform the job, costs will increase. In the same way that the input is considered quality if it satisfies certain requirements, the staff is quality if they have certain skills and attitudes that make it reliable to properly carry out a task, task or management.

The company is responsible for selecting the most suitable personnel for the tasks to be carried out, but must also keep them suitable for the activities to be carried out in the company through training, training, motivation and correct leadership.

21. Internal transport

Waste of internal transportation is another broad term that covers every aspect associated with necessary transportation due to poor layout, material handling (such as stacking items, picking them up, sorting them), and moving things from one side to the other. Sometimes the waste of the existing internal transportation system is due in large part to the complexity that includes excessive distances and weights, or under-utilization of in-band transportation systems.

Belt conveyors and material handling systems not only impose a high toll on productivity, but also absorb valuable factory space. Additionally, the more times an item is moved or manipulated, the greater the probability that it will be damaged.

22. Waiting times

Also called idle time, it is a broad term that includes the idle times of people and machines and covers a wide variety of cases. Waiting time, idle time, or dead time is generally time wasted waiting for something. However, the causes of such waiting can be divided into causes originating from the “waiting side” and those originating from the side that makes the waiting side wait. In many cases, the causes come from both sides.

Timeout wastage occurs when the operator's hands are inactive; when an operator's work is stopped due to imbalances in the line, lack of spare parts or time of non-work and operation of the machines; or when the operator simply supervises a machine while it performs value-adding work.

The main causes on the source side of downtime production include personnel, machines, workpieces, and internal transportation items. On the waiting side, there is still a greater variety of causes, but the main factors are related to the personnel and the machine.

23. Excessive movements

Not everything that is done during a workday adds value. In fact, the vast majority of typical worker tasks are "movement" and very little is actually work. Movement is waste. Movement that adds no value is nothing but waste. Work operations are the movements that workers make while doing their jobs.

Operational waste can be created by poor equipment layout or poor placement of parts, templates and tools. To improve such situations we must begin by asking ourselves why is this operation necessary? to check first if it is feasible to delete the operation entirely. But if the operation serves a necessary function, we then start working to reduce the amount of movement required of the worker to do the operation.

24. Excessive bureaucracy

Excessive bureaucracy has its reason for being for different reasons.

• Organization of work by functions. Personnel specialized in certain functions who cannot perform multiple tasks. Administrative processes with serious design flaws. Duplication of information and controls. Not making optimal use of new tele-computing technologies. Excessive controls. Generation of overlapping partial solutions. positions and functions. Creation of jobs for reasons of friendship or search for power. Absence of clear and precise concepts of bureaucratic productivity.

Organization by functions leads to problems similar to those seen in the productive area. In this case we will have an office in charge of receiving credit requests, at the end of the day all requests will be sent to the credit analysis sector, and the next day another sector will be in charge of authorizing them or not. Excessive number of steps, personnel, response times. This is what led to the first process reengineering.

Badly designed administrative processes record the existence of unnecessary activities or processes, carried out by non-competent personnel, badly located in the organization's layout, carried out at the least convenient or appropriate time. And finally done in the least effective and efficient way. You get to know about it by asking yourself about:

• What is done? Why, who does it? Why, where? Because when? Why and how is it done? Why?

The Zero Base Budget is a good way to compel the rationale for each activity and the raison d'être of its cost to justify the heads of organizations. Benchmarking is also a way of comparing the administrative processes of a company with those of a company taken as a guide.

The irresponsible generation of an increase in the fixed costs of the organization is something that must be given a disciplined and systematic fight. Excessive bureaucracy not only generates higher costs in itself, but also makes the other areas and processes of the organization less productive.

25. Waste of energy

Among the causes of higher energy consumption than required we have:

• Excessive internal transportation Spaces greater than necessary (light consumption, cooling and heating) Failures in production and reprocessing work Machines with malfunctioning Times of excessive vacuums Loss of steam or electricity Inefficient management of energy resources and lack of controls on energy consumption

Aiming at the seven classic wastes we can give a first shape to the work of reducing energy waste.

The procedure for obtaining the final good, which is called the process, is not always the same because in some cases the machinery may be older and in others more modern, even the process itself may be more or less efficient. If we achieve that the required quantity of energy is less to obtain the same quantity and quality of product, we will be in the presence of energy saving.

26. Variations in exchange rates, interest rates and prices of raw materials

We attend daily an avalanche of headlines in all the media "Inflation rises", "The price of a barrel of Brent marks a new all-time high", "Significant increase is recorded in active interest rates", "The Euro continues falling relative to the Dollar ”…………..

All these headlines have a reflection in the world of the company and more specifically in its costs. The variability of prices will cause undesirable budgetary deviations via growth in financial costs, depreciation of flows via exports, increase in energy supply costs and, of course, increase in salary costs with increasingly higher inflation revisions.

All these events can be mitigated or even deactivated in certain circumstances with sufficient anticipation and the appropriate financial instruments. The future cannot be read but it is possible to prepare to protect yourself from negative effects.

There are fundamentally three types of risk factors that companies can face in their management, regardless of their primary business. Interest, exchange rate and commodity price risks are the most notable.

27. Frauds

Fraud can be defined as that behavior by which a person tries to take advantage of another by surprising them in their honesty. As society reacts to overt acts of violence and terrorism, concentrating resources and dedication in the search for solutions, there are huge hidden losses, possibly even more damaging in the long term, generated by fraud actions, to which due Attention.

In recent years, and due to the large increase in international violence, companies have tried to improve physical security measures. While the attention paid to manifest losses has increased, they have stopped addressing the most surreptitious risks, such as those derived from the action of the unfair or corrupt employee, dishonest connections or competition, the industrial spy or the organized criminal.

The very secrecy with which fraud occurs hides it from our attention: it acts as a malignant tumor that corrodes the company itself and, through this erosion, it is society as a whole that pays its consequences.

In such a circumstance and given the effect that frauds have on the running of the company, it is good to adopt measures conducive to detecting, preventing, reducing and eliminating them.

The rule that must always be kept in mind is the one that states that "the easiest way to earn money is to stop losing it."

Fraud includes aspects as varied as:

• The use for personal or personal purposes of materials, supplies, energy, services, information and working time by staff, whether they are employees or managers. The sale of information, is that generated by research and product development, Market research or customer base. Counterfeiting of brands and / or products. Bribes. Theft of supplies, materials, products, formulas and documentation. Delivery by suppliers of material or components of lower quality, and in less quantity than the contracted., with the clear intention of benefiting to the detriment of the acquiring company.Use of the company's funds illegitimately, collection of interest and commissions not agreed, collection of services not agreed. Misrepresentation or manipulation of accounting data in order to show the achievement of goals;in many cases with the purpose of obtaining special prizes. Accounting manipulation to hide errors or management shortcomings (hide bad credit management or an over-stock, among others).

We can see from the exemplified cases that fraud can be carried out by internal or external agents or a combination of both, in order to obtain benefits, which result in an explicit or implicit loss, and a mediate or immediate loss for the company.

28. Serious shortcomings of controls

This shortcoming is not only linked to the commission of frauds but also to the lack of optimal management of resources. Thus a lack of control and analysis on the evolution of repair costs leads to a misallocation of resources, correcting symptoms instead of the root causes of the problems. Similarly, the lack of control, monitoring and evaluation of consumption such as water, electricity and fuel can not only lead to the flight of resources due to possible fraud, but also due to a malfunction of machines and equipment.

It is worth asking if the interest charged by financial institutions is calculated, verifying that the previously agreed interest rates and commissions are being applied. It has been observed in important companies that the external audits, carried out by important international firms, verified that the accounting imputations will agree with those invoiced or debited by the Banks. Both the Internal and External Audit considered the data provided by the Banks to be good. A big surprise came from the company's managers when they were shown that the financial institution had debited much more than was due in the interest of applying a higher rate than that established between the parties.

Similarly, it is necessary to control prices and apply bonuses established by the payment date or amounts purchased. The same is true for bonuses awarded to customers.

Flaws in the calculation and application of taxes and wages lead to equal risks of loss. It may be operating in good faith, but a calculation error detected by the comptroller agencies will not only require the payment of what is not paid at the time, but also the payment of fines and interest.

29. Lack of insurance

Not having risk management appropriate to the activity carried out by the company constitutes not only a risk in itself, but the loss of resources in the event of an unexpected event.

From fire, theft, and bad debt insurance, through accident insurance and personal life insurance. Not only does it count to have the insurance contracts, but also that they are not expired, that the amounts are the corresponding ones and that the conditions that make the insurance collection feasible are being fulfilled.

Not being properly insured not only generates the possibility of monetary losses for the company, but in some circumstances even puts its own continuity at risk.

30. Lack or defect in contingency plans

Very few think beforehand what to do about certain circumstances. Not being aware of what can happen and what to do if it happens is very serious.

We can give as examples contingency plans in the event of a cut in the supply of a certain imported input, contingency plans in the event of a flood in the plant area. Or contingency plans in the event of a cut in the electricity supply.

If a specialist in a certain activity leaves the company, are there personnel with sufficient knowledge and experience to replace it? Who can take your place in the current squad?

If a certain supplier ceases to exist or increases the prices of inputs too much, have a list of alternative suppliers been established?

Making plans of this nature implies having contacts with replacement suppliers, having alternative means to respond to a situation.

This type of plan highlights the capacity of the company's managers and advisers. They clearly show the need to continually think about the progress and development of business.

Contingency plans must also be related to business intelligence in order to assess changes in consumer demand and tastes, new competitors in the market, changes in technologies for both the product or service and its production. A company can be very efficient and competitive today, generating a very good profitability, it falls asleep and its clients move to a new supplier with different products or services, or of better quality and prices. While changes are never sudden, being unprepared for them can then lead to a lack of time and resources to act as quickly as each case warrants.

Bibliography

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