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The 8 WastesCutting Waste makes a business lean
Basics about Value and Waste- Eliminating waste is the most effective way to increase profitability
- Any processes adds either VALUE or WASTE to a product or service
- Minimizing or eliminating waste "Muda" makes a process Lean
- The concept of waste applies to all businesses – manufacturing and service
1. Waste: Over-ProductionProducing an item before it is needed, also called “Just-in-Case” (JIC) Disrupts flow, increases inventory, reduces flexibility, capacity and quality Change to Just-in-Time (JIT) – produce only when needed at exact amount JIT requires accurate scheduling and flexible equipment to adjust to demand Changing from JIC to JIT makes problems visible – must address & correct! Upgrade skills and redesign systems, structure and flow to enable JIT
2. Waste: Wait & QueueOccurs when goods are not moving or wait in process In traditional "batch & queue” manufacturing, 90-99% WIP is waiting Caused by poor loading, material flow, large batches and long distances Solution: do tasks in parallel rather than in series to reduce wait Rearrange and link work-centers and add visual triggers to create flow
3. Waste: Internal TransportMovements take time and reduces quality and risk of damage and failure Solution: map flow, value-stream and re-layout process, office and factory Find ways to move items without interruptions, pick-up, put down, move
4. Waste: Over-ProcessingCaused by using inappropriate methods, machines or tools Using sophisticated machines when a simple tool would suffice = waste Inflexible, highly automated machines require long change-over times Expensive machines promote heavy loading to recover large investments Heavy loading beyond demand causes overproduction and excess inventory Combine steps and build small and flexible work-centers (Cells) Reduce activities to only what a task or customer really requires Consolidate, group operations, performed within one step or work-center
5. Waste: Inventory Inventory from Work-in-Progress (WIP) is a result of overproduction & wait Departmentalized organization and structure causes inventory from buffers Inventory consumes space & money, increases lead-time, hides problems Solution: steer material-flow from Just-in-Case (JIC) to Just-in-Time (JIT)
6. Waste: Motion Bad ergonomics cause excess motion: reaching, walking, lifting, bending Solution: redesign job to improve speed and reduce motion Rearrange process and layout so that all tools/equipment is reachable Implement tools, fixtures, aids to eliminate excess motion
7. Waste: Defects Defects cause scrap, repair, rework, backflow and warranty/replacements Defects consume resources for inspection, correction, replacement Defects cause opportunity-loss (capacity and resources used to fix problems) Defects cost 5% of Sales for 6-Sigma and 40% of Sales for 1-Sigma process Reduce variability, lock gains, implement controls and error-proofing
8. Waste: People-Potential Definition: “Do what you’re told” Reason: status-quo, top-down Impact: suppressing ideas and learning System: bureaucratic, strict hierarchy, many levels Process: excessive manuals/procedures People: low communication, disengaged, wait for decision Develop people, manage bottom-up, engage all capable people Define process, rules, limits (playing field), metrics and targets Delegate decision-making and administration to lowest possible level
Cut Waste to increase ProfitsA traditional business operates at 97-99% waste (97% in manufacturing, 99% in service). If a business is successful at 97-99% waste, how much better could it operate and how much more could it generate at lower waste-percentages? The potential is very large. Impact of cutting waste: PRODUCTIVITY - consuming fewer resources while maintaining output (cost-avoidance) CAPACITY - producing more with same people, time and equipment (throughput-gain) SPEED - reducing cycle-times and shorter time to market (inventory/lead-time reduction)
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