Why Complexity Is Quietly Eating Your Margin

Show Notes

Complexity doesn’t announce itself. It accumulates. One extra approval. One redundant system. One workaround that quietly becomes standard practice. Before long, the operation is slower, costlier, and more frustrating despite having more tools and processes than ever. In this POV episode of Handled It, Joe Perkins and Brent Hillabrand are joined by Ashley Watkins and Woody Paschal of Carolina Handling to unpack complexity as a hidden cost that rarely appears on a P&L but affects every line of it. Woody shares real-world examples from the field, including a segmented manufacturing operation where “pockets of simplicity” quietly added up to system-wide complexity, and a customer who saved more than $25,000 a year simply by adding a pickup to an already scheduled return trip. The group explores how complexity creeps in without anyone consciously choosing it, how a “process Frankenstein” is built one reasonable decision at a time, why 30% of warehouse labor is spent on non-value-adding work, and why the solution is almost always subtraction, not addition.

In this episode, you will learn:

- Why complexity is something you accumulate, not choose, and why it rarely fixes itself

- How “pockets of simplicity” create system-wide complexity

- Why adding process is easy, but removing it is hard

- What 30% non-value-adding labor really costs

-Why subtraction beats addition in process improvement

-When technology simplifies operations and when it adds complexity

- How Carolina Handling uses data to reveal the real problem

The most expensive thing in your operation is the one that never shows up in a budget line. Learn how to find it and take it back.

Key Moments:

00:45 – Meet the lean consultant: Why process—not just equipment—drives operational performance

01:45 – How complexity quietly creeps into every operation over time

03:45 – The manufacturing example: Eliminating unnecessary handoffs to improve flow

07:40 – "Process Frankenstein": How years of bolt-on fixes create operational complexity

09:45 – The three biggest places waste hides in warehouse operations

11:45 – Why poor onboarding and lack of standard work drive employee turnover

17:10 – Let the data tell the story: How to convince leaders to simplify processes

22:30 – The difference between documented processes and what actually happens on the floor

30:00 – When technology simplifies operations—and when it only creates more data

33:55 – The rant: Why organizations design unnecessary complexity and how subtraction creates speed 

Transcript

The most expensive thing in an operation may never appear as a separate line on the profit and loss statement.

It is complexity.

Complexity consumes labor, slows decisions, complicates training, hides waste, and makes growth more difficult. Yet it rarely arrives as one major change. It develops gradually as organizations add another process, system, approval, report, workaround, or handoff.

Each addition may seem reasonable on its own. Together, they can create an operation with more tools and procedures than ever that still feels harder to manage than it should.

The answer is not always another investment.

Sometimes the organization must subtract what no longer serves it.

How Complexity Creeps Into an Operation

Complexity can take many forms.

It may come from a task with high volume that requires many associates to complete. It may be created by strict time constraints, regulatory requirements, or intricate work. It can also develop within a process that should be simple but has accumulated too many steps and too many people over time.

Organizations rarely intend to overengineer their operations.

One manager changes a procedure to solve an immediate problem. Another introduces a tool to improve visibility. A third adds an approval after an isolated mistake. Each decision becomes part of the normal workflow, even after the original problem or manager is gone.

Growth can accelerate the pattern. As the business changes, leaders continue adding processes to meet new demands without revisiting whether the old ones are still necessary.

Complexity does not always look complex at the individual step. It often becomes visible only when leaders examine the entire flow.

Simple Departments Can Create a Complex Operation

A process can appear efficient within every department and still perform poorly as a whole.

Consider a manufacturing facility in which different teams are responsible for separate stages of production. Each team completes a straightforward task inside its own clearly defined area.

The problem begins at the handoffs.

Instead of moving a product according to its natural value flow, one associate takes it only to the edge of a department and places it in a staging area. Another associate must retrieve it, determine where it belongs, and move it again.

Every team may be meeting its local goal, but the operation has created extra touches, additional travel, more staging space, and repeated decisions.

The departments have created pockets of simplicity that produce overall complexity.

Removing the rigid line between those areas can allow an associate to move the product directly to its final destination. That reduces handoffs while giving the operation greater flexibility to deploy labor where it creates the most value.

The lesson is important: optimizing one department does not necessarily optimize the business.

Leaders must evaluate the complete path taken by the product, information, and people—not only the performance of each individual area.

The Process Frankenstein

Years of additions can turn an operation into a process Frankenstein.

One system was selected by a former manager. Another required a significant capital investment. A third was connected to an existing platform. Because the organization invested time and money in each component, leaders feel obligated to keep using it.

The pieces remain tied together even when they no longer fit the operation.

This is where sunk-cost thinking becomes expensive. The organization focuses on what it spent years ago rather than what the legacy process is costing every day.

A tool may once have provided value. That does not mean it should remain indefinitely.

Every process, system, and report should continue earning its place by supporting the outcome the organization is trying to achieve.

If it does not, the prior investment is not a reason to preserve it. It is a reason to learn from it.

Where Operational Waste Hides

Complexity often hides in ordinary work.

One of the most common problems occurs when associates do not have what they need, where they need it, and when they need it. The missing item may be a physical tool, material, or information.

Each gap creates a work stoppage.

The associate searches for an item, asks another employee for help, waits for an answer, or creates a workaround. One interruption can quickly involve several people who are all trying to solve the same problem.

Weak visual management creates similar waste. If material does not have a clearly designated location, employees must spend time determining where it belongs or searching for it later.

Waste also appears in single-purpose travel.

At one operation, associates transported products from a production line to the shipping dock and returned empty. Their task was narrowly defined as getting the product to the dock as quickly as possible, even though materials at the dock regularly needed to travel back toward production.

Adding a pickup to the return trip turned the movement into a dual-purpose task. That simple change created more than $25,000 in estimated annual labor savings.

The improvement did not require a new machine or software platform. It required someone to examine the full trip and ask whether the work already being performed could create more value.

Complexity Is Also a People Problem

Operational complexity is not limited to space, systems, and material flow.

It also affects the workforce.

Many organizations struggle to onboard employees quickly enough for them to become productive. Leaders may assume the problem is the new associate's experience or learning ability when the real issue is a process without clear standard work.

The employee is expected to learn through observation, informal instruction, or trial and error. Different trainers may teach the job differently, and the work performed on the floor may not match the role described during hiring.

The organization has effectively sold the employee one job and introduced them to another.

That disconnect creates frustration and turnover. The business loses the person after already investing in recruiting, hiring, and training.

Temporary labor can amplify the cost. When employees must become productive immediately, the operation needs tasks that are clear, repeatable, and easy to understand. Every unnecessary decision or workaround lengthens the path to productivity.

Simplifying work can therefore improve more than throughput. It can strengthen onboarding, increase confidence, and help the organization retain people.

Non-Value-Added Work Has a Dollar Figure

Lean thinking distinguishes between the work required to operate and the value the customer is actually purchasing.

When a customer orders a pizza, the value is the correct pizza arriving as expected. The customer is not purchasing every internal movement, approval, or conversation required to produce it.

Those internal activities may still be necessary, but they should not be confused with customer value.

Research discussed during the episode estimates that 30% of warehouse labor time is spent on non-value-added tasks.

That does not mean associates are intentionally wasting time.

It often means the organization has built a system that requires them to work around broken technology, search for information, repeat scans, wait for approvals, travel empty, or compensate for a process that does not reflect the reality of the floor.

If labor is one of the operation's largest expenses, that percentage has a dollar figure attached to it.

Not every non-value-added task can be eliminated. Compliance, safety, and business requirements may make some activities necessary. The practical goal is to reduce waste wherever possible and continually question whether each step is still required.

Even incremental reductions can return meaningful capacity to the operation.

Let the Actual Process Tell the Story

Convincing a leadership team that its systems are no longer serving the business can be difficult.

The most effective approach is not to begin with an opinion. It is to let the operation's own data tell the story.

Gemba walks, process maps, observations, cycle times, and other visual tools allow leaders to see what is actually happening. They turn an abstract concern into evidence the organization can evaluate together.

The distinction between the perceived process and the actual process is critical.

Leaders often believe they understand how work is performed because they know how the process was designed or documented. But procedures evolve. Associates develop workarounds, volumes change, systems are added, and exceptions gradually become normal practice.

The process described in a conference room may be very different from the process occurring on the floor.

A useful process map follows the real flow step by step. It reveals delays, repeated touches, unnecessary movement, and activities that do not affect the quality or delivery of the final result.

Once those steps become visible, the organization can ask a better question.

Instead of only asking, “How can we perform this step more efficiently?” leaders can ask, “Should we be performing this step at all?”

Frontline Associates Hold Critical Information

The people performing the work often understand its problems better than anyone else.

They know where the process stops, which instructions are unclear, what technology requires extra effort, and which workaround is keeping production moving.

That does not mean every suggested solution will become the final answer. It does mean their experience is essential to identifying the root cause.

The quality of the conversation matters.

Repeatedly asking “why” can sound accusatory and place employees on the defensive. Questions such as “Help me understand how this works” or “Walk me through what happens next” invite explanation without suggesting that the associate created the problem.

That distinction is especially important because frontline employees may have designed a workaround in response to a system leadership gave them. What appears inefficient from a distance may be the only way they have found to complete the job.

When leaders ask thoughtful questions and listen carefully, the subject-matter expert becomes empowered to say, “This is no longer serving me.”

Improvement becomes something done with employees rather than to them.

Follow the Entire Flow

Improving one constraint can move the problem upstream or downstream.

An operation may increase the speed of one production area only to overwhelm the next. It may optimize one team's performance while creating more staging, travel, or waiting elsewhere.

That is why leaders must examine the entire ecosystem.

Local efficiency is not the same as overall performance. A department can achieve its metric while the total process becomes slower and more expensive.

Following the full flow helps leaders understand the relationship between steps and identify the outcome the process is supposed to produce.

If an activity does not move the operation closer to that outcome, it should be challenged—even when it has always been done that way.

When Technology Simplifies, and When It Does Not

Technology can remove manual effort, accelerate workflows, improve visibility, and help associates make faster decisions.

It can also create more complexity.

Organizations sometimes add technology primarily to collect data. A new scan, field, report, or system entry may take only a few seconds, but those seconds multiply across every associate and transaction.

Leaders should apply the same scrutiny to digital processes that they apply to physical work.

What decision will the data support? Who will use it? How often will it be reviewed? Does its value justify the time required to collect it?

If the information simply enters a spreadsheet or report that no one uses, the organization has converted labor into data without creating value.

One internal review found that an employee was spending a full day preparing reports that were not being used. The work was completed accurately and consistently, but the outcome did not justify the effort.

The value of the data must match the time required to produce it.

Automated workflows can create meaningful simplification when they move necessary work forward without another manual touch. But organizations should not automate a process simply because it exists today.

First determine what truly needs to happen. Then automate the standard workflow while giving employees a clear and rapid path for handling exceptions.

Otherwise, technology can make a flawed process faster without making it better.

Eliminate, Combine, Rearrange, and Simplify

One practical way to examine a process is the ECRS method: eliminate, combine, rearrange, and simplify.

Begin with elimination.

Can a step be removed without changing the value delivered to the customer?

Next, look for opportunities to combine activities. Can two tasks be completed during the same movement, interaction, or transaction?

Then consider rearrangement. Would changing the order of the steps reduce travel, waiting, or duplicated work?

Finally, simplify what remains. Can a five-step process become a three-step process without sacrificing safety, quality, or compliance?

Removal should be the default starting point because adding work creates an immediate adoption challenge. Employees hear that they have one more task to complete and may resist before they understand the intended benefit.

Some situations will still require additions. Customer expectations, regulations, and safety requirements change. But the organization should first determine whether the problem can be solved by removing or redesigning existing work.

Experiment Before You Institutionalize

Continuous improvement requires a willingness to test an idea without pretending to know the answer in advance.

An observation creates a hypothesis. The organization plans a change, tries it, checks the result, and acts on what it learns.

This Plan-Do-Check-Act cycle allows teams to experiment rapidly before turning an idea into another permanent process.

Some tests will work. Others will not.

The goal is to learn quickly enough to adjust before an ineffective idea becomes embedded in the operation.

Leaders must make it acceptable for an employee to say, “My idea did not work, so we are going to try something else.” That response is not failure. It is evidence that the organization is learning.

Rapid experimentation helps companies win fast and lose faster—before another well-intentioned solution becomes tomorrow's complexity.

Continuous Improvement Must Become Cultural

A dedicated continuous improvement team can educate employees, introduce tools, facilitate discovery, and help the organization see its processes differently.

It cannot own improvement alone.

Continuous improvement scales when it becomes part of every leader's role and, ultimately, every employee's mindset.

The improvement team should not exist only to solve problems for the organization. It should help people learn how to solve problems themselves.

That requires alignment and support from leadership. A continuous improvement group without authority, clear priorities, or executive buy-in will struggle to create lasting change.

The work also becomes vulnerable when continuous improvement is only one of many unrelated responsibilities assigned to the same person. Daily production demands will usually displace the work that does not appear essential to getting today's product out the door.

Organizations must treat improvement as part of operating the business, not as an optional project pursued only when time becomes available.

Final Takeaway

Complexity is expensive because it hides inside everyday work.

It appears in unnecessary handoffs, empty travel, unused reports, repeated approvals, unclear training, legacy technology, and workarounds that have become permanent.

No single step may look significant. Together, they consume labor, reduce margin, frustrate employees, and prevent the operation from reaching its full capacity.

Leaders can begin by walking the floor and mapping the process as it actually happens.

Listen to the people performing the work.

Use data to reveal the cost.

Challenge whether each step should exist.

Eliminate, combine, rearrange, and simplify before adding another solution.

Technology, automation, and new processes can create value—but only after the organization understands what work truly needs to happen.

Scale is not built by adding more.

It is earned by subtracting what no longer serves you.