Waste is a bad thing. So, any wise manager will do well to eliminate it. You just need to know where to look. One of the many contributions of Taiichi Ohno and his Toyota Production System (TPS) was to catalogue 7 Wastes that we need to eliminate.
The 7 Wastes are now a fundamental part of the concept of lean thinking; whether applied to manufacturing, services, or public administration. By understanding them, you can make just about any process more efficient.
Why would you eliminate waste? The answer is implicit in the question. But it depends on a definition of waste that implies it’s unwanted. We’ll do that in a minute.
The profit a business makes from its activities is crudely the selling price minus the costs. So, anything that increases the cost is bad. And anything that does so without improving the product or the profit is doubly bad. That’s waste.
It’s the same in public service and the voluntary sector. Diminishing the resources you have available to serve your clients, without delivering benefit is equally bad; equally wasteful.
So, as a result, we seek to reduce waste. And Taiichi Ohno categorised its forms into 7 Wastes.
What are the 7 Wastes?
In Japan, waste is generally known as ‘muda‘, meaning wasted effort. In fact , there are other forms of waste: ‘mura‘ and ‘muri‘.
- Muda: Wasted effort
- Mura: Inconsistency
- Muri: Unreasonable requirements
The 7 wastes constitute ‘muda’ and were originally articulated by Toyota’s Chief Engineer, Taiichi Ohno. They are a core part of the Toyota Production System, now more widely known as Lean Production, or Lean Manufacturing. We recently looked at another Lean Production tool, Kanban.
To eliminate waste, you need to understand exactly what waste is and where to find it. While there are an infinite variety of products and services, Ohno’s genius was to identify 7 wastes that are found almost everywhere. For each waste, your task is to reduce or eliminate it, and so improve efficiency and quality.
Definition of Muda
Here is a helpful working definition:
Muda is an activity that uses resources but creates no value for the customer, client, or end-user.’
Let’s list the 7 Wastes
The most common way people remember the 7 Wastes in English is with the acronym TIMWOOD. So I’ll offer the 7 Wastes in that order:
Transporting product between processes adds cost but not value. And extra handling can cause damage and so reduce quality. Material handling also requires equipment that needs to be bought and maintained. The solution is to move equipment and processes closer together, and the method is to map product flows to visualise better layouts of your work-space.
Excess inventory increases the need for working capital, consumes productive space, and can lead to too much transporting. It applies to raw materials, work in progress (WIP) and finished goods. You want a smooth flow between work stations, cutting inventories and their associated costs. Too much WIP usually results from overproduction and waiting.
Originally, this referred to ergonomics. If workers need to bend, stretch, walk, lift, or reach too much, it introduces health and safety risks. Even when there are no accidents or strains, excess motion takes time. Now, the same is true of machines. If a robot’s motion is not optimal, then it wastes a tiny amount of time. Repeated over thousands of motions a day, compounded over years, and you have a significant waste..
Whenever goods are neither moving nor being worked on, they are waiting. Nothing is happening; the product is tied up in waiting for the next operation. It’s a waste. And, outside of a production environment, executives spend time waiting for an answer from another department, or waiting for a delivery from a supplier, or a support engineer to come and fix your computer. Try noticing the amount of time you spend waiting for things in your work.
What a waste. It disrupts flow, which is one of the main principles of Lean. So waiting is one of the more serious of the seven wastes or 7 mudas of lean manufacturing. It is also the key to Eliyahu Goldratt’s Theory of Constraints.
Overproduction means manufacturing an item before it is needed or, simply, making too much or too many of it. A central plank of the Toyota Production System is ‘Just in Time’ (JIT) manufacturing. Every item is made just as it is needed. So, we can call overproduction ‘Just in Case’ manufacturing!
Overproduction increases lead times and storage costs (inventory), and it makes it hard to spot defects.
It arises from larger batch sizes than are needed, so the simple solutions are to reduce the batch sizes, or stop the process. Schedule and produce only what you can immediately sell and distribute. This needs courage because the overproduction is probably hiding a load of more fundamental problems. Overproduction is often regarded as the worst of all the 7 wastes. To a degree, it includes all the others and so was the main driving force for the Toyota Production System, which emphasised Just in Time manufacturing.
Over-processing is doing more to a product than the end-customer needs. The result is a longer and more expensive production process. Examples include using components that are more precise, complex, or higher quality than necessary. This also applies to over-specified plant and machinery, which cost more to buy and maintain. Toyota became famous pioneering low-cost automation, and immaculately maintaining older machines to drive down whole-life costs. So, investing in smaller, simpler, more flexible equipment assets, and doing no more than your quality standards require.
Defects have a direct impact to the bottom line. They need to be found, removed, and then reworked or scrapped. Associated costs include:
- quarantining inventory
- capacity loss
Six Sigma and other quality management processes, along with Continuous Process Improvement (CPI also called Kaizen) and business process re-engineering, are all approaches you can deploy to reduce defects and save cost.
More than 7 Wastes?
Under-utilisation of Employees or, sometimes, Unused Creativity
Too often, organisations employ their staff to do a specific job, but forget they have brains, and an array of other talents. (Take a look at our recent article on Multiple Intelligences). If you can capitalize on your employees’ creativity, you can more readily eliminate the other 7 wastes, and continuously improve your performance.
Three others I have found in my research (taking us to 11 Wastes!) are:
- Unsafe workplaces and environments
Employee accidents, health issues, and stress that result from unsafe working conditions and poor management.
- Lack of information or poor information sharing
Good data, analysis, and communication are essential to keep operations working well, and improving continuously.
- Equipment breakdown
Poor equipment maintenance can result in damage and lost time. This often results from a predominantly reactive, rather than preventative, maintenance regime.
How to Reduce the 7 Wastes
The ‘Deming Cycle’ (which was actually invented by Walter Shewhart) of Plan – Do – Check – Act is a fundamental part of identifying and then eliminating the 7 Wastes, or muda. Would that we had space to go into this in more depth.
What is Your experience of 7 Wastes?
We’d love to hear your experiences of finding and eliminating waste, along with your ideas, and questions. Please leave them in the comments below, and we will respond.
To learn more…
The Improving Efficiency Pocketbook is full of tips, techniques, and tools to improve your operation and reduce costs by increasing efficiency and eliminating waste.