Category MUDA

We are often faced with the challenge of finding new ideas to help category teams think about where opportunity might lie in a particular area of purchasing. Fortunately, there are a lot of well established approaches to fall back on once the most obvious suggestions have been made.

One I find particularly useful; Muda. I like it for the word as much as anything, but there is a lot in here for us to play with. Muda (and a tip o’the hat to Wikipedia here) is a Japanese word with a spread of meanings, around wastefulness and uselessness. It was adopted and adapted by Toyota into their Production System, but fear not, it has wide application into the world of category management and supplier relationship management.

Muda encourages us to explore the concept of waste in the products or services we are buying, to help us identify areas in which change can be addressed. This is a great linkage into the concept of value levers, as reducing waste is a really effective way of increasing value within an area of supply.

Consider, for a moment, reports from consultants. Many businesses buy these (and indeed we’ve produced a few). However, many of the recommendations never make it into the real world, and so much of the value and effort (and cost) is wasted. Products are bought, but never used, managing to waste not only the original purchase price, but also waste the costs of storage and maintenance over time. Equipment is bought without any ability to install or use it, making nonsense of the concept of Return on Capital Employed. You will have your own favourite examples of this, with a set of suitably outraged facial expressions.

The thing is, we seldom tackle this as an issue, or indeed even recognise it in the areas we are working in. We often create waste at the point of highest potential of the product or service. Take a packet of fresh vegetables in your refrigerator. It originated in a field thousands of miles away, it has been tended, harvested, packed, transported, re-transported, found by you in a supermarket after a drive of 7 miles, bought, transported home, and placed in the refrigerator. It is so full of potential, it is amazing all by itself. But then, forgotten at the back of the fridge, the vegetables go brown and are rejected, finishing their amazing voyage in your dustbin, ready to start their final journey to the refuse site.

If we were better at shopping, we would only buy the vegetables we need.

So, how can we take advantage of MUDA? Start by looking it up, then see what you can apply to your next category project. It will be fruitful.

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About Mark Hubbard

I set up a specialist purchasing consultancy and a business focussing on seeking innovation. I work all over the world with clients, helping purchasing teams develop new ways of delivering value for their businesses. I love thinking about how purchasing works, and how it can be better, and I'd love to share some of those thoughts with you
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