The core of Lean methodology involves the identification and elimination of waste. To help focus efforts in this area, Lean practitioners developed a list of eight wastes which establish the most likely areas where waste will occur: defects, overproduction, transportation, non-value adding processing, motion, waiting, unused talent and inventory.
Understanding these eight areas and focusing process improvement efforts within each of them is a key to success when implementing Lean practices. This is the primary way Lean is different from Six Sigma, which focuses more on finding and eliminating repeated errors and mistakes.
The 8 Wastes of Lean
The eight wastes of Lean apply to processes involved in creating products, developing specialized services or any process that occurs in the routine course of business.
These areas of waste apply to car manufacturers, farm-based bakeries, hospitals or cabinet door companies. They are universal in application.
Defects
When defects occur, it’s necessary to scrap the product and start all over again, thereby creating one of the biggest possible wastes of time, materials and money. In Lean, which has a singular focus on meeting customer needs, a defect means anything that does not satisfy customers.
Reducing the number of defects is one of the main reasons behind the creation of Six Sigma. By using the popular DMAIC (define, measure, analyze, improve and control) methodology, it’s easier to find and eliminate defects in a process.
Overproduction
Success can lead businesses to overproduce their products, getting too far ahead of consumer demand. This also applies to processes within the overall operation, such as producing too many parts before workers downstream in the operation are ready to use them. That kind of glut can lead to extra costs to store materials, among other issues.
Paying better attention to the Voice of Customer and understanding what they need will curtail overproduction. To make sub-processes work in tandem requires a complete production system plan that considers the details of operation functions in every phase.
Transportation
Problems with transportation typically arise from poorly planned processes. In this context, transportation can mean any part of a process that requires carrying – by hand or vehicle – necessary tools and materials. It can also refer to the time it takes to transmit needed information to continue a process (such as approvals from managers). The longer the transportation route, the larger amount of wasted time.
Using Value Stream Mapping can help reduce inefficiencies in a process by giving teams a visual depiction of every interlocking phase of a process, making it easier to find areas where changes are needed.
Non-Value Added Processing
A variety of issues can lead to actions that do not add value to a process. They include the typical signs of a poorly planned process: poor communication, areas of responsibility that overlap, and data duplication. In Lean, it’s vital to assess every step in a process and determine if it adds value to the customer.
Value Stream Mapping can help in this area, as can tools such as The Five Whys that allow organizations to drill down to the underlying reasons for operational problems.
Motion
If a process requires employees to take extra steps – whether physical steps or those taken within a software system – that’s a sign of a poorly planned process. Wasted time is wasted money. This problem often traces back to poorly planned work stations as well as work flow.
Setting up efficient work stations and processes helps eliminate wasted motion. To maintain a smart, efficient work station, companies put the 5S system into play.
Waiting
Waiting can happen in a variety of ways in a production process. In most cases, it involves workers waiting for people upstream to either give them the materials or information they need to proceed with their job. Bottlenecks that develop lead to waiting and wasted time. Other forms of waiting can involve issues such as having to attend numerous meetings rather than getting work done.
This is another area where mapping out a process can help streamline production and eliminate waiting. A Fishbone Diagram can also help break down every aspect of the operation into its smallest component parts, helping to find the small issues that can often lead to big problems.
Inventory
Problems with inventory can result from overproduction of materials or finished products that then must get stored. It also can involve ordering too many materials from suppliers and needing large amounts of warehouse space to store them. With inventory, the waste involves the extra money needed to maintain warehouse space that would not get spent with a more streamlined process.
This is an issue often handled by addressing overproduction or over processing.
Unused Talent
This is not related to process issues, but rather a company not leveraging all the employee talent they have at their disposal. For example, frontline workers often have more insight into the true causes of problems than their own managers – as well as ideas on how to address the issue. Unused talent is a challenge at companies in every industry. Eliminating this waste requires managers to make a thorough examination of the skills and knowledge their employees possess and how to put them to use to improve operations.
