Setting Zero Waste Goals

One example of a goal from lean thinking is zero waste or zero defects. Once these goals are determined, processes are created and implemented to help employees reach them.

The job of a leader is to motivate those around them. They do this by determining acceptable standards, minimum performance levels, and defining goals. Good leaders will usually set a high but achievable bar for success, and then inspire others to reach it.

Setting a goal of less than zero when it comes to defects and waste sends the message to employees that only a minimal effort is acceptable by the company. When employees and leaders have a mindset that a certain degree of waste and defects are acceptable, they will not strive hard to eliminate them. Read on if you are doubtful that this is how company leaders operate.

Leadership through Inventory Turns
The average S&P 500 company keeps around one month of inventory on hand, or about 12 turns. Twelve times a year (once a month) the inventory will turn over. Of course this is just an average, some companies will turn over more and others will turn over less. But is 12 a good number to shoot for?

Wastes from various process defects within an organization can be hidden in inventory. Inventory is often created by problems. Average companies will have inventory turns of between five and fifteen. It is considered good if a company has inventory turns of between fifteen and twenty. It is considered very good when a company has inventory turns of over twenty five, and turns between fifty and a hundred are considered great.

Outstanding Inventory Performance
It is easy to see why companies who excel at inventory turns also excel at customer service, productivity, and delivery. Many studies have proven this assertion.