Tackling Muda: The 7(8) Deadly Wastes

How do we improve our end to end processes?

Delivering all products and services takes 3 things - time, resources and energy.

How do we identify the steps in a process that add value and those that don't?

"Why waste time learning when ignorance is instantaneous?"

Bill Watterson

Taiichi Ohno was a Japanese industrial engineer and businessman who worked for the Toyota motor company from 1943. He is responsible for what is known as the Toyota Production System within which he devised many improvement frameworks including the seven wastes (or muda in Japanese).

Muda means futility; uselessness; idleness; superfluity; waste; wastage; wastefulness. Muda is just one of three types of issues Taiichi identified as deviations from the optimal allocations of resources. The other two are mura (unevenness) and muri (overburden).

All of this work was with the aim of reducing waste, which in turn reduces costs and is very effective at increasing profitability.

"Costs do not exist to be calculated. Costs exist to be reduced.”

Taiichi Ohno

His traditional 7 areas in which wastes occur are:

Transport: In excess of what is required to meet customer demand. Inventory: Materials, products or resources in excess of customer demand. Motion: The movements between process steps. Waiting: Waiting on product, people or machines. Over Processing: Processing in excess of what is required. Overproduction: producing in excess of customer demand. Defects: passing poor quality down the supply chain. Lean practitioners have added an 8th to his list. The "unofficial" but widely accepted 8th: Skills: Not seeking out the expertise or creativity of your own people

Muda gives us a framework through which to think about and evaluate opportunities to eliminate waste.

What is waste?

The easiest explanation of waste is anything that adds no value to the final product or service. Generally speaking, customers are not happy to pay for any action, time, or resource that does not add value to what they actually want.

For example would you be happy if you received a bill from your mechanic for a service that included labour for a part that they removed in error and had to refit? No you would argue to have this taken off the invoice and have it be at their cost.

However with packaged services and goods these kinds of wastes are already baked into the price. The consumer generally has no visibility. These waste costs either inflate the prices for the customer or reduce the profit for the company. In most cases it does both.

Why get rid of waste?

Every customer wants perfect quality, on time delivery and the right price. Selling prices are always dictated by the market. Everything is only ever worth what someone is willing to pay for it. In order to grow profits companies need to reduce costs. Eliminating waste not only helps reduce these costs but also help drive customer satisfaction.

By reducing any one of the 8 wastes you will shrink time, costs or energy in the delivery of your business products.

A Journey through the wastelands

The original list was created with manufacturing in mind. These paradigms are easily transferable to the service industries and information management equivalents.

Transportation

Transporting items or information that is not required to perform the process from one location to another. This included:

Unnecessary material movement. Unnecessary tools or equipment movement.

Production Examples:

Large distance between operations

Lengthy or complex material handling systems

Large batch sizes

Working to faster rate than customer demand

Multiple storage locations

Poor route planning

Distant suppliers

Complex material flows

Poor layout

Disorganized workplace

Service Examples:

Movement of files and documents

Excessive email attachments

Multiple hand offs

Strategies to reduce:

Store materials as close to the point of use as possible

Avoid transportation over long distances

Avoid overproduction (so there is nothing excess to store)

Inventory

Inventory or information that is sitting idle (not being processed). The more idle time there is in production or service delivery the greater the wastage costs. These include:

Excessive process (WIP) inventories. Excessive raw material inventories and supplies.

"The more inventory a company has, the less likely they will have what they need."

Taiichi Ohno

Production Examples:

Overproduction

big batch sizes

Long lead times

Local optimization (turf mentality)

Large minimum order quantities

High rework rate (ties into defects)

Just In Time (JIT) incapable suppliers

Lack of material requisition and issuance standards

Service Examples:

Files and documents waiting to be processed

Excess promotional materials sent to market

More infrastructure than required

Strategies to reduce:

Dispose of obsolete material to save space and avoid confusion

Do not produce items ahead of customers delivery requirements

Do not manufacture products in excess of customer's requirements

Motion

People, information or equipment making unnecessary motion due to workspace layout, ergonomic issues or searching for misplaced items.

Unnecessary movement and motions of worker.

"The only place that work and motion are the same thing is the zoo where people pay to see the animals move around”

Taiichi Ohno

Production Examples:

Poor workstation layout - excessive bending, walking and reaching

Poor method design - transferring parts from one hand to another

Reorientation of materials

Poor layout and housekeeping

Disorganized workplace and storage locations

Unclear, non-standardized work instructions

Unclear process and materials flow

Service Examples:

Looking for data and information

Movement of people to and from office equipment

Strategies to reduce:

Motion economy principal

Effective supervision

Waiting

Waiting for the previous step in the process to complete. Getting ahead on things before they are needed as much as being behind on things cause wastage in many areas.

Man idle or waiting time. Machine idle or waiting time.

Production Examples:

Unsynchronized processes; line imbalance

Inflexible workforce

Over staffing

Unscheduled machine downtime

Long setup times

Material shortage or delay

Manpower shortage or delay

Service Examples:

Customers waiting to be served in a contact centre

System downtime

Over Processing

Performing any activity that is not necessary to produce a functioning product or service.

Non-value added man processing. Non-value added machine processing.

Production Examples:

Unclear customer specifications

Frequent engineering changes

Excessive quality (refinements, "polishing")

Inadequate value analysis/value engineering

Unclear work instructions

Service Examples:

Too much paperwork in process

Same data required in multiple places in a process

Follow up coordination costs

Too many approvals

Reporting overburden

Strategies to reduce:

Improve work allocation

Identify more effective methods

Limit overproduction

Overproduction

Producing too much of a product before it is ready to be sold.

Producing more than what is needed. Producing faster than what is needed.

Production Examples:

Volume incentives (sales, pay, purchasing)

High capacity equipment

Poor scheduling/shifting

Poor production planning

Cost accounting practices that encourage build up of inventory

Service Examples:

Information sent automatically even when not required

Printing documents before they are required

Processing items before they are required by the next person in the process

Strategies to reduce:

Strong production planning and control

Production according to customer schedule

Firm delivery requirements

Defects

Whether in a manufacturing or a service environment, a defect will be a waste because it is something that does not meet the customer's requirement.

Processing due to the production of defects. Processing due to rework or repair of defects. Materials used due to defect and rework.

Production Examples:

Unclear customer specifications

Incapable processes

Lack of process control

Unskilled personnel

Departmental rather than total company quality improvement initiatives

Incapable suppliers

Service Examples:

Rejections in sourcing applications

Incorrect data entry

Strategies to reduce:

Design review

Reduce defective materials

Train employees

Maintenance of machines and equipment

Skills / Underutilized People

Employees that are not effectively engaged or utilized in the processes.

"The ability to add your creative ideas & changes to your own work is what makes it possible to do work that is worthy of humans"

Taiichi Ohno.

Production Examples:

Inappropriate policies

Incomplete measures

No time made available in operators work schedule

Problem solving only done with "experts" ignoring employees

Top down improvement ideas

Service Examples:

Limited authority and responsibility

Person put on a wrong job

Strategies to reduce:

Give staff ownership of work

Eliminating waste

Eliminating the wastes can be done through the implementation of Lean and the various lean tools and frameworks. However your focus should not be to identify and remove waste. You should always start with identifying the value according to the customer. Make those value adding processes flow through your organization at the pull of the customer.

"When you go out into the workplace, you should be looking for things that you can do for your people there. You've got no business in the workplace if you're just there to be there. You've got to be looking for changes you can make for the benefit of the people who are working there.”

Taiichi Ohno

It is always better to identify and work towards the things that you do want, rather than focusing on the things that you don't. Getting rid of the things you don't want doesn't leave you with the result you desire.