Hello and welcome to Business 300.

My name is Philip Kulenshov and this is 300 seconds about business.

We're all a busy people, so I have five minutes or less to get my point across.

Really, do we even need more than five minutes at a time?

Let's get this done and get back to it.

No time to waste.

This episode has been overdue for a while.

Way back in episode 62, I introduced the concept of the seven wastes.

A waste in your business operation is anything your customer is unwilling to pay for.

Episode 75 laid a bedrock for how to think about waste.

I discussed the first six was sporadically.

It was spread out intentionally to not overwhelm you with all of them at once.

I'm a fan of drip everything.

Drip productivity, drip learning, drip doing.

Maybe not so much drip wearing, but to each his own. I covered overproduction,

over processing, motion, waiting, transportation, and inventory. We finally arrived to cover the seventh and final waste, defects. Defects seem to be fairly obvious. Clearly, making the wrong part or a

mistake on the part is wasteful. It's not difficult to imagine how much the material and labor costs for the mistake that was made. Defects are expensive. But most of us

don't realize how expensive mistakes really are. It's not just what we spent on the part that is

the cost. It's the opportunity cost for the lost revenue that we should consider. Defects is overproduction,

but worse. If you spent time making a defective part, you have made something that customer doesn't need,

which is overproduction, and it's something no customer will ever need,

meaning you can't put it on a finished goods shelf for a potential future sale.

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