Eight types of waste

Reasons why the waste occurs

1.Over-production: Building batches of products larger than the customers’ immediate need. This waste typically occurs because we want to increase utilisation of large and important machines, are worried about rejects and absenteeism so we produce more to be on the safe side. In just-in time systems being ahead of the production schedule is regarded as worse than being behind it.
2, Waiting: Production operators waiting because a machine has gone down, or a component is not available. Or when the operators are simply monitoring the machine as it does its value adding task. Whilst operators being idle is easy to measure, it is more difficult when they are looking busy. In one example in a German automotive manufacturer, the set-up time in the press shop was reduced from 10 hours a week to 3.5 hours.
3. Transportation: Moving materials around the factory. Any process that is physically distant from the main line should be incorporated into the line if possible. Masaaki Imai points out a common sign of a problem with layout is the need for conveyor belts. He goes on to say, “The best thing a company can do with its conveyor belts is to sell it to their competition, or send it to them free of charge.”
4. Extra processing: Processes that appear productive but are unimportant to the customer. Value stream accounting provides good guidance here. Do not include any costs and activities that do not add value to the customer.

 

There are many ways an  organisation can have extra processing.

  • Monthly reports that are prepared for accountability purposes but are not read or used by the recipient.
  • The majority of Excel spreadsheets that are a reprocessing of already recorded transactions.
  • The chart of accounts where it holds more than 50 codes for the P/l
  • Annual planning processes that take months and are useless as soon as the ink has dried.
  • Designing additional features into a product that the customers do not use e.g. many features in Excel are not used.
5. Excess inventory: Having materials, components, work-in-process, and finished goods levels above the immediate need. When an inventory level is high nobody gets serious enough to deal with problems like quality, machine downtime, and absenteeism, and thus an opportunity for Kaizen is lost.

Also, with generally accepted accounting principles all finished goods carry prior months’ overheads into the future periods these goods were sold.  Carrying forward  costs to future periods leads to additional costs hitting the P/L when inventory levels fall.

6. Waste of motion:  Any motion of a person ‘s body not directly related to adding value is unproductive.  While very evident in manufacturing environments it is of equal importance in all other environments.

 

 

I recently witnessed a classic waste of motion activity in a hospital.  I was in the  the emergency department of Wellington’s largest hospital and my wife was having her blood pressure read.  Because my wife’s records could not be brought into the room the nurse, who was wearing protective gloves, had to write the temperature down on a scrap of paper and then transfer it to the file when she returned to her work station.

There are many ways an organisation can have a waste of motion

  • Disorganized employees who do not have all their tools with them on a site visit
  • Health workers double handling patient information
  • Office workers who cannot access previous work files efficiently
7.Waste due to rework and rejects that have to be scraped: Rejects interrupt production and require expensive rework (processing again to correct faults) or have to be discarded. Reports that have to be rewritten are effectively rework.
8. Unused employee creativity: Employee ideas having to hurdle many obstacles before adoption and therefore not being raised. Based on Toyota, we would need to have 10 innovations implemented per team member per year before we could say there is no waste in this area.

 

While some of these types of waste, appear at first sight, to only be relevant to manufacturing you can apply many of them into other sectors.  Since, as Dr Jeffrey Liker points out, “Most business process are 90% waste and 10% value-added work” there is a lot of scope in this area.

To find out how to surmount these barriers purchase David Parmenter’s working guide which is on sale at USD 29.90 and comes with 15 electronic templates.

A Look inside the Innovation working guide:

A perfect storm.. 2

Understanding Gemba Kaizen Innovation. 3

  • Housekeeping. 3
  • Waste elimination. 5
  • Visual management 7
  • Adopting winning methods 7

Blue Ocean Innovation. 8

The five-step Blue Ocean Shift Model 9

  • Step 1: Get started. 9
  • Step 2: Understand Where You Are Now.. 18
  • Step 3: Imagine where you could be. 22
  • Step 4: Find how you get there. 24
  • Step 5: Choose and make the blue ocean move. 28

Selling and Leading Change. 31

  • Steve Zaffron and Dave Logan. 31
  • Harry Mills’ Self Persuasion. 32
  • John Kotter’s Leading Change. 32
  • Selling A BOS Project to the Senior Management Team.. 33
  • Learn to Sell by Using the Emotional Drivers of the Buyer 34
  • The Elevator Speech. 34
  • Deliver a Compelling Burning Platform Presentation. 35

Wisdom from the great management thinkers. 37

  • Peter Drucker’s Lessons on Innovation. 38
  • Jim Collins’s Lessons for Innovation. 42
  • Jack Welch’s Lessons for Innovation. 42
  • Thomas Peters and Robert Waterman’s Lessons for Innovation. 43
  • Gary Hamel’s Lessons for Innovation.  . 43
  • Jeremy Hope’s Lessons for Innovation. 44
  • Tom Peters’ Lessons for Innovation. 44

E-Templates include

  • Post-it re-engineering
  • Understanding where you are now
  • Establishing a BOS Project Team Checklist 48
  • Establishing BOS Team Questionnaire. 50
  • BOS Team Applicant Questionnaire
  • BOS Team 360-Degree Questionnaire. 53
  • “Just Do It” Culture and Process Checklist 55
  • Job Description for the BOS Team Leader 56
  • Workshop Preparation Checklist 58
  • Guidelines to Running Workshops. 60
  • Pioneers, migrators, settlers template
  • Six pathways exercise
  • Step 2 scoring factors
  • Buyer utility map
  • Four actions framework

The working guide can be purchased from