Taiichi Ohno, a Japanese industrial engineer and businessman, is considered to be the father of the Toyota Production System. He became Lean Manufacturing in the U.S. and he devised the seven wastes (or muda in Japanese) as part of this system.
Ohno’s principles influenced areas outside of manufacturing, and have been extended into the service arena. For example, the field of sales process engineering has shown how the concept of Just In Time (JIT) can improve sales, marketing, and customer service processes.
Ohno was also instrumental in developing the way organisations identify waste, with his “Seven Wastes” model which have become core in many academic approaches. These wastes are:
1. Delay, waiting or time spent in a queue with no value being added
2. Producing more than you need
3. Over processing or undertaking non-value added activity
5. Unnecessary movement or motion
7. Reduction of Defects
The seven wastes of Lean Manufacturing are what we are aiming to remove from our processes by removing the causes of Mura and Muri as well as tackling Muda directly.
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
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 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.
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
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
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
The waste of Overprocessing 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
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 autonomation 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
With a little thought it is also possible to see how the 7 wastes apply to personal processes too. The thing to remember here is the value stream. 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 your needs and make those value adding processes flow through your objectives. 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. To eliminate the 7 wastes of lean we have to focus on the lean principles and value as perceived.