Can you find your Hidden Factory?

Do any of your customers or staff understand what it means to have a “Hidden Factory” and its impact on the products and services they provide? Most business owners will have some awareness of tangible waste items such as excessive stock, defective products, and office over-processing. But the hidden waste within your business may not be as tangible or easily calculated. Hidden wastes may take the form of products or services requiring re-work, lost labour and machine hours, or even unsatisfied customers demanding compensation. In many industries, the ubiquity of social media and online reviews can easily impact a business’s bottom line. Many high-profile companies have been affected by bad publicity spreading over the internet. The cost of lost income to your business due to potential customers taking their business elsewhere is immeasurable. It is important for organisations to ensure their process get everything right first time in order to eliminate costly sources of error and waste. The term Hidden Factory is used to encapsulate these costs that business operations or manufacturing processes create. It is an important consideration for any business to examine and identify where costs can be reduced, thereby increasing profitability.

If this is the situation in your business, then it may be time to reconsider how you deal with hidden waste. By identifying and quantifying the extent of your hidden waste, steps can be taken to eliminate as much as possible from being generated in the first place. This may be a complete company overhaul and culture change, or smaller improvements to your company’s processes. Whatever the action or combination of actions taken, a different way of doing things which ismore efficient and produces a better-quality outcome is possible. It is much easier for the business owner or director to measure success by units sold and business turnover. It is much more difficult however to measure costs in terms of failure. After all, focusing on the negatives and highlighting failures is never a pleasant or enjoyable task but it is essential if your business is going to continue to grow and remain competitive within your industry.