7 Wastes in the process
Lean is a strategy for your organisation to create value and reduce waste. Any solution which makes both of these improve for all stakeholders is successful.
There are 7 commonly recognised wastes within the lean community. These are shown below.
The 7 wastes tackled by lean thinking (and standards)
Many books explain and define these 7 wastes; I will quickly do the same.
As your people become more familiar with lean, they will see these 7 wastes more and more often, even better, they will find ways to reduce them.
Transport is the waste you have when you move a product or service between locations and / or people in order to start the next step in the process. People confuse transport waste with value in that they say “I moved it so we could add value” when they should be saying “it moved in one direction towards the ultimate customer, in all organisations, and never back and forth.”
Inventory is the waste you have when you have products or components (including items necessary for a process) which are not going to be immediately used or sold. This inventory waste thinking conflicts with our economy of scale thinking; buy big and get a big discount. Inventory waste recognises that you have to store, manage and move inventory and also that inventory gets damaged, expires or becomes obsolete; therefore always try to have lower and lower inventory. Inventory also allows for suppliers to hide poor quality, the lower the inventory the lower the number of defective components that you and the supplier will have to resolve when a defect is discovered. Consignment stock and customer managed inventory do not eliminate inventory; they just hide the ownership and / or decision making in ordering inventory. Lean recognises all of these perspectives and always tries to lower the total inventory of both finished goods (at your organisation and your customers) and raw materials (at your organisation and your suppliers).
Motion is the waste you have when an employee moves around their place of work in order to complete the process. This waste is best seen when you stand in one place and observe people; I have seen people move over 3km in one day and they worked in an office. Do you pay your people to waste 2 hours walking every day? Save time, energy, injury and delays by eliminating unnecessary motion.
Waiting time is a waste the customer always experiences and your employees are very vocal about; someone is always waiting for someone else. Some waiting time is valued; if you are in an expensive restaurant you do not want your food in the same time as a fast food restaurant. Eliminate the waiting time customers do not value, like waiting for their check at the end of the meal or ensuring that when you say the fish will take 20 minutes they receive it in 19 minutes. They will be delighted by your organisation’s reliability (meeting your promises) and service (ensuring they receive hot, freshly cooked food when it is ready).
Over-production is often called the mother of all wastes. This is because if you make more than is needed, you have inventory. When you have excessive inventory then two things commonly happen: you make customers wait as you search for the right product and you pay higher storage costs. Standardised work, in partnership with standards, is a great method to reduce over-production. When you have reliable and predictable processes, you can afford to make things either later than previously thought or when the customer asks. This is clear when it comes to a physical product and less clear for a service. Service over-production can be thought of as producing documents or information which are not needed for the process to achieve its goals (think reports which are produced but never read).
Over-processing is when you touch, move, alter, enhance or check a product or service, more often than the customer truly values. Typing an address from one system onto a spreadsheet is a simple example, whereas including features on a product that the customer does not value may be more difficult to quantify.
Defects: if over-production is the mother of all wastes, then defects is the father. Defects create rework, write-offs and the need for inspection, they are prevalent everywhere in service based processes and over the next 50 years, hopefully they can be minimised in a way which has been similar to the achievements within manufacturing. Also be aware that a defect free product is not the same as a product the customer values.
The 8th Waste: Some lean literature will suggest unutilised talent as an eighth waste (or list 7+1 wastes). I disagree that unutilised talent is a waste for one simple reason: unutilised talent does not relate to the product or service; it relates to the people making the product or service. To maximise the use of talent I suggest fixing management with better ways in managing the new standard, as described in my new book, The Joy of Standards.
In summary: Lean is a strategy for your organisation to create value and reduce waste. I recommend The Joy of Standards to eliminate the 7 wastes and make value improve for all stakeholders. Try it and see.
This post is an authorised extract from The Joy of Standards available on Amazon in paperback, Kindle and iPad (Kindle App).