The War On Waste

During training in how to do kaizen, a key activity is helping people understand the concept of waste and make it relevant to their own organization and to their own work. As long as waste is something abstract, or something that happens in the factory but not in software development activity or the executive suite, you are losing the war on waste.
“How much of your work do you think is waste?” People’s answer to this question differs quite a bit depending on what point in their Lean education you ask this question. Suffice it so say that the number gets asymptotically larger the more they learn about Lean.
How much money do you think the U.S. healthcare system wastes in a year? About 50% of costs, or $1 trillion, according to numbers we have cited from Dr. Robert Mecklenburg of Virginia Mason Medical Center in Seattle. Stunning, and sickening, yet help is on the way in the form of consultants and instructors from other industries who are working with patience and dedication to educate healthcare professionals on how to see their work as a process which can be improved continuously.
One of the places you can read about this exciting work being done at the Group Health Cooperative at the Daily Kaizen blog.
How much money do you think the U.S. government wastes in a year? First of all, just how much does the U.S. government spend? Here are the budgets for the last 12 years:
– U.S. federal budget, 1997: $1.6 trillion (submitted 1996 by President Clinton)
– U.S. federal budget, 1998: $1.7 trillion (submitted 1997 by President Clinton)
– U.S. federal budget, 1999: $1.7 trillion (submitted 1998 by President Clinton)
– U.S. federal budget, 2000: $1.8 trillion (submitted 1999 by President Clinton)
– U.S. federal budget, 2001: $1.8 trillion (submitted 2000 by President Clinton)
– U.S. federal budget, 2002: $2.0 trillion (submitted 2001 by President Bush)
– U.S. federal budget, 2003: $2.1 trillion (submitted 2002 by President Bush)
– U.S. federal budget, 2004: $2.2 trillion (submitted 2003 by President Bush)
– U.S. federal budget, 2005: $2.4 trillion (submitted 2004 by President Bush)
– U.S. federal budget, 2006: $2.6 trillion (submitted 2005 by President Bush)
– U.S. federal budget, 2007: $2.8 trillion (submitted 2006 by President Bush)
– U.S. federal budget, 2008: $2.9 trillion (submitted 2007 by President Bush)
How much of that is waste? Just the act of measuring how much of this number is waste would no doubt cost taxpayers many millions of dollars, which is waste. We can get some idea from this CBS Evening News report on Pentagon spending, titled The War On Waste:
“We know it’s gone. But we don’t know what they spent it on,” said Jim Minnery, Defense Finance and Accounting Service.
Also from the article:
“According to some estimates we cannot track $2.3 trillion in transactions,” Rumsfeld admitted.
Appalling.
And the words of Retired Vice Admiral Jack Shanahan, commanded the Navy’s 2nd Fleet:
“With good financial oversight we could find $48 billion in loose change in that building, without having to hit the taxpayers.”
The U.S. Senator Everett Dirksen has been credited with saying, sometime in the 1960s, “A billion here, a billion there, pretty soon you’re talking about real money.” Let’s turn that around. The same is true when we make war on waste. A billion here and a billion there does add up to quite a lot in cost savings if everyone learned to recognize the vast amounts of waste around them, and if everyone was empowered to change that through kaizen.

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