What Exactly is Waste?
The simplest way to describe waste is as “Something that adds no Value.” Our customers would not be happy to pay for any action that we take that does not add value to what they actually want and nor should we be.
Would you be happy if you received a bill in a restaurant that included a meal that was prepared in error? No; you would argue and demand that it was removed from your bill; yet if you buy a product in a store the price that you pay will contain costs that you would not want to pay.
Would you want to pay for the machine operators wages whilst they sat idle waiting for a delivery, or for the rework processes that had to be undertaken because the machine was incorrectly set, or even for storing your product for three months before it was delivered to the store? These wastes are included within the cost of your products, either inflating the price you pay or reducing the profit of the company.
Why Remove Waste?
Your companies Profit is your selling price less your costs, no matter how you think about the selling price it is very much dictated by the market not by yourself. If you charge too much then your customers will go elsewhere, even if you charge too little you may lose customers as they will perceive there may be something wrong with what you are offering. Therefore the only way you have to improve your profits are to reduce your costs; this means removing all elements of waste from your processes.
In addition to improving your profits you will find that waste has a major impact on your customer’s satisfaction with your products and services. Your customers want on time delivery, perfect quality and at the right price. Something that you cannot achieve if you allow the 7 wastes to persist within your processes.
The Waste of Transport
Transportation is a waste and costs you money.
Transport is the movement of materials from one location to another, this is a waste as it adds zero value to the product. Why would your customer (or you for that matter) want to pay for an operation that adds no value?
Transport adds no value to the product, you as a business are paying people to move material from one location to another, a process that only costs you money and makes nothing for you. The waste of Transport can be a very high cost to your business, you need people to operate it and equipment such as trucks or fork trucks to undertake this expensive movement of materials.
The Waste of Inventory
Inventory Hides Problems.
Inventory costs you money, every piece of product tied up in raw material, work in progress or finished goods has a cost and until it is actually sold that cost is yours. In addition to the pure cost of your inventory it adds many other costs; inventory feeds many other wastes.
Inventory has to be stored, it needs space, it needs packaging and it has to be transported around. It has the chance of being damaged during transport and becoming obsolete. The waste of Inventory hides many of the other wastes in your systems.
The Waste of Motion
Excessive motion of either people or a machine is a waste.
Unnecessary motions are those movements of man or machine which are not as small or as easy to achieve as possible, by this I mean bending down to retrieve heavy objects at floor level when they could be fed at waist level to reduce stress and time to retrieve. Excessive travel between work stations, excessive machine movements from start point to work start point are all examples of the waste of Motion.
All of these wasteful motions cost you time (money) and cause stress on your employees and machines, after all even robots wear out.
The Waste of Waiting
Eliminate the waste of waiting to make your processes smoother
How often do you spend time waiting for an answer from another department in your organization, or waiting for a delivery from a supplier or an engineer to come and fix a machine? We tend to spend an enormous amount of time waiting for things in our working lives (and personal lives too), this is an obvious waste.
The Waste of Waiting disrupts flow, one of the main principles of Lean Manufacturing, as such it is one of the more serious of the seven wastes or 7 mudas of lean manufacturing.
The waste of Overproduction
Over producing what the customer does not want now is a waste
The most serious of all of the seven wastes; the waste of overproduction is making too much or too early. This is usually because of working with oversize batches, long lead times, poor supplier relations and a host of other reasons. Overproduction leads to high levels of inventory which mask many of the problems within your organization.
The aim should be to make only what is required when it is required by the customer, the philosophy of Just in Time (JIT), however many companies work on the principle of Just in Case!
The Waste of Over-processing
Doing More than the customer wants costs you money
The waste of Over processing is where we use inappropriate techniques, oversize equipment, working to tolerances that are too tight, perform processes that are not required by the customer and so forth. All of these things cost us time and money.
One of the biggest examples of over-processing in most companies is that of the “mega machine” that can do an operation faster than any other, but every process flow has to be routed through it causing scheduling complications, delays and so forth. In lean; small is beautiful, use small appropriate machines where they are needed in the flow, not break the flow to route through a highly expensive monstrosity that the accountants insist is kept busy!
The Waste of Defects
Defects hide many other problems and wastes
The most obvious of the seven wastes, although not always the easiest to detect before they reach your customers. Quality errors that cause defects invariably cost you far more than you expect. Every defective item requires rework or replacement, it wastes resources and materials, it creates paperwork, it can lead to lost customers.
The Waste of Defects should be prevented where possible, better to prevent than to try to detect them, implementation of pokayoke systems and automation can help to prevent defects from occurring.
Waste of Talent; failing to make use of the people within your organization. This is an issue that many of our companies in the West fail to address. We still tend to operate within a command and control environment and take little real notice of what our employees really think and what they can contribute. Your employees are your greatest asset by far and can help you to drive out many of the other wastes.
Waste of resources; failure to make efficient use of electricity, gas, water. Not only does this waste cost you money it is also a burden on our environment and society as a whole.
Wasted materials; too often off-cuts and other byproducts are just sent to landfill rather than being utilized elsewhere.
Eliminating the Seven Wastes
Eliminating the seven wastes is something that can be done through the implementation of Lean and the various lean tools, however the focus of your implementation should not be to identify and remove waste. Instead you should use the principles of lean manufacturing to identify value according to the customer and make those value adding processes flow through your organization at the pull of the customer. This approach helps you to make your value adding processes more efficient and causes the waste to literally “dissolve.”
Approaching lean from a perspective of removing the 7 wastes rather than making value flow however usually ends up with us making non-value adding processes more efficient and we get better and better at doing things that the customer does not want. To eliminate the 7 wastes of lean we have to focus on the lean principles and value as perceived by our customers.
In practically all the projects that we have handled and companies we have studied we have found one thing in common. The cost of waste is significantly high. It’s out there in the open and yet invisible. Companies often sense that is indeed eating away at their bottom line just like termites and although they are working very hard the results are no where as good as they would like it to be
There is enough empirical data available which tells us that companies regularly lose at least 10-30 % of their top line to various forms of WASTE. Thru this mini series we are attempting to shed light of various kinds of waste that you carry in your organisation. If businesses have to survive and grow then the WAR on WASTE has to be fought daily and won.
To identify the wastes in your factory & to begin eliminating them contact www.ideasmith.com , Today!