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Seven wastes of negotiation: Difference between revisions
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The [[Toyota Production System]] (TPS) was created by Toyota’s chief engineer [[Taiichi Ohno]] to eliminate [[waste]], called “muda.” [[Waste]] — as opposed to ''{{wasteprov|cost}}'', is the enemy on any production line: a process that is ''inherently necessary'' must add value, even if it is expensive<ref>If you can’t configure it so it costs less than the value it adds, consider why you are running the process ''at all'': you have a loser of a business.</ref> so you should be cool about paying a fair value for it. | The [[Toyota Production System]] (TPS) was created by Toyota’s chief engineer [[Taiichi Ohno]] to eliminate [[waste]], called “muda.” [[Waste]] — as opposed to ''{{wasteprov|cost}}'', is the enemy on any production line: a process that is ''inherently necessary'' must add value, even if it is expensive<ref>If you can’t configure it so it costs less than the value it adds, consider why you are running the process ''at all'': you have a loser of a business.</ref> so you should be cool about paying a fair value for it. | ||
Processes which do ''not'' add value are inherently wasteful. The job is to eliminate waste, not {{wasteprov|cost}} ''[[per se]]''. To get rid of waste, you have to know exactly what waste is and where it exists. | Processes which do ''not'' add value are inherently wasteful. The job is to eliminate waste, not {{wasteprov|cost}} ''[[per se]]''. To get rid of waste, you have to know exactly what waste is and where it exists. Ohno-sensei categorised [[seven wastes|seven types of waste]] and for each one, suggested reduction strategies. | ||
Ohno-sensei categorised [[seven wastes|seven types of waste]] and for each one, suggested reduction strategies. | |||
Even though he was talking about a physical manufacturing line, Ohno-sensei’s categories of waste cross over pretty well to the contract [[negotiation]] process, a fact which seems to have escaped every [[management consultant]] who has ever ruminated on the issue. A lot of them have. | Even though he was talking about a physical manufacturing line, Ohno-sensei’s categories of waste cross over pretty well to the contract [[negotiation]] process, a fact which seems to have escaped every [[management consultant]] who has ever ruminated on the issue. A lot of them have. | ||
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*'''{{wasteprov|Overproduction}}''': Negotiating contracts that are never ultimately executed, or which are, but where there is low (or no) order flow. Cars which you can’t sell. | *'''{{wasteprov|Overproduction}}''': Negotiating contracts that are never ultimately executed, or which are, but where there is low (or no) order flow. Cars which you can’t sell. | ||
*'''{{wasteprov|Waiting}}''': Any point in the negotiation process where you are waiting for continuing the negotiation: drafts to client; questions to sales; escalations to risk. | *'''{{wasteprov|Waiting}}''': Any point in the negotiation process where you are waiting for continuing the negotiation: drafts to client; questions to sales; escalations to risk. | ||
*'''{{wasteprov|Transport}}''': Any unnecessary hand-offs to other departments (or the client) is the equivalent of transporting stock in trade in a physical | *'''{{wasteprov|Transport}}''': Any unnecessary hand-offs to other departments (or the client) is the equivalent of transporting stock in trade in a physical manufacturing process. Keep it to a minimum by sequencing the production inputs. | ||
*'''{{wasteprov|Over-processing}}''': | *'''{{wasteprov|Over-processing}}''': Unnecessary complexity in product design and manufacture that doesn’t have any practical application for the client or utility for your risk management team. Hint: ''this is the gorilla in the room''. | ||
*'''{{wasteprov|Inventory}}''': Work in progress that is not finished product on the shop floor. In a negotiation, that is the client agreement for the time between inception and execution. The longer that average period the larger the inventory. You can’t make any money out of a product while it’s still in the factory. | *'''{{wasteprov|Inventory}}''': Work in progress that is not finished product on the shop floor. In a negotiation, that is the client agreement for the time between inception and execution. The longer that average period the larger the inventory. You can’t make any money out of a product while it’s still in the factory. | ||
*'''{{wasteprov|Motion}}''': The longer and more convoluted a contract is the longer it takes to read, understand, comment on and conclude. All other things being equal, any unnecessary formal complexity will add time and effort to the job. Short, utilitarian, Spartan contracts. Easy to handle. Robust. | *'''{{wasteprov|Motion}}''': The longer and more convoluted a contract is the longer it takes to read, understand, comment on and conclude. All other things being equal, any unnecessary formal complexity will add time and effort to the job. Short, utilitarian, Spartan contracts. Easy to handle. Robust. | ||
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===It’s about your people, not the [[management consultant]]s you hire=== | ===It’s about your people, not the [[management consultant]]s you hire=== | ||
Sure, you can sluice the [[waste]] out of your Augean stables — there’s nothing more satisfying than a spring clean — but the Toyota methodology is very clear that | Sure, you can sluice the [[waste]] out of your Augean stables — there’s nothing more satisfying than a spring clean — but the Toyota methodology is very clear that long term, things will revert to how they were unless your organisation commits, through its permanent staff, to a continual process of self-improvement. This is a skill — a disposition, that you won’t get from dropping a hundred grand on a six-sigma black belt for three months to fix everything for you. | ||
The reasons for this are as obvious as they are routinely ignored: projects, priorities, processes and people change, and the [[path of least resistance]] is to layer a new process over an old one. That kind of short-termism is exactly the environment that created the baffling complexity, redundancy and waste in the first place: [[barnacles]] quickly accrete unless your | The reasons for this are as obvious as they are routinely ignored: projects, priorities, processes and people change, and the [[path of least resistance]] is to layer a new process over an old one. That kind of short-termism is exactly the environment that created the baffling complexity, redundancy and waste in the first place: [[barnacles]] quickly accrete unless your people are permanently committed to process excellence. Train your staff to be constant gardeners, and you won’t need periodic visits from McKinsey to dig you out of holes. | ||
{{sa}} | {{sa}} | ||
*[[A faster horse - technology article]] | *[[A faster horse - technology article]] | ||