Cutting Business Expenses: Waste Reduction That Makes Cents!

Every time you write a patient report, photocopy some notes or buy a box of paper clips, you’re incurring expenses. Business expenses can either add value or create waste as we render services to our patients. So, how can we ensure we efficiently convert all our time, money and effort into profits?

Business waste can account for between 25% – 40% of the operating costs of any business. Say for instance, our annual operating costs rose to $100k, that’s potentially $25,000 to $40,000 lost to waste and inefficiency! Can you afford to lose this much? Absolutely not!

Unfortunately, this has become an accepted fact in many businesses. We often put more emphasis on increasing income which results in pushing more business through an inefficient system. This makes no sense at all.

The car manufacturer, Toyota, has first identified Seven Wastes in businesses. Identifying the main waste areas in your business is the first step to reducing and possibly eliminating these wastes.

So where can you save in your business?

Overproduction is doing something in excess of what is required. It often shows up as over servicing. We typically go out of our way to please our patients, as we want to create a positive impression and differentiate ourselves from other providers, especially in the early stages of our practice. What often happens is we do things that we don’t charge for and over the course of time those things become standard and expected by our patients.

Waiting occurs whenever time is not being used efficiently. In any business, somebody is always waiting for something somewhere. A common experience when we are waiting for someone else to perform a task. This issue often arises when a process has to pass through a number of hands from start to finish. How good is your process of writing patient reports for doctors so your administration people can send them out in a timely fashion?

Transporting refers to movement of people, goods and information. Look around the layout of your office or clinic. Are there any barriers to movement around your office For example, can you complete a patient consultation in one room or do you have to move between rooms to perform different tests like gait analysis or scanning? If you feel you are covering more empty spaces than you need to, you might want to look for opportunities to save time.

Inappropriate Processing happens when we use a sledge hammer to crack a nut. In essence, we incur unnecessary expense when we are not using the right tool, process or person to finish a task.

A typical example is slow moving stock like footwear or some consumables. There needs to be a system in place to measure the movement of stock so decisions can be made on what is and isn’t moving.

Unnecessary Motion is seen in all instances of bending, stretching and reaching. A typical occurrence in an office is the layout of the reception and the process of greeting and billing our patients.

Are there ways this could be configured to make this as stress-free as possible? Reducing motion waste enables us to work smarter, not harder.

Defects are any error in a process that causes our products or services to fall below our client;s expectations.

The most common issue here is re-working. For example, how many times do we have to schedule a patient to re-fit an orthotic?

Now that we have identified our seven wastes, look back at the checklists and note all the wastes that you have ticked.

Think of ways to remove or reduce them in your practice. Until you start tightening your systems and streamlining the interaction between people and processes in your business, the identified wastes will remain as unwanted expenses.

As service practitioners, we want to perform tasks that add value to our patients. With more efficient systems in place, we can do more business and concentrate on what we do best care for our patients.

Til next time,
Greg