Lean manufacturing and the seven wastes

One of the classic lean manufacturing concepts is the seven wastes (or eight wastes as it is sometimes described). I think this is a great entry level process improvement concept and a waste is easier to identify than a value-added step. It is also a low-risk approach to improving your processes as you are not interfering with value-add steps. We will discuss definitions in more detail later but just to get you started- Wastes are activities that do not increase the value of your product or service.

The seven wastes key benefits and drawbacks

The key benefits of tackling the seven wastes:

• Easier to identify wastes. People naturally know when things are being wasted.
• The act of distinguishing between value and waste. This develops the process improvement practitioner’s understanding of a process.
• Quick results. Some wastes are easily identified and removed; it is often embarrassing that you have put up with them for so long.
• Compress delivery times. The primary benefit to the customer is that they get their product on time.

There are some drawbacks to only focussing on tackling waste activities, these are worth understanding, we will discuss them in more details later. For now, these are the highlights:

• Can lead to uneven flow.
• Can mistake a value-added step for a waste.
• Low enthusiasm. People want to work on the value-added steps.

Now you have read the introduction you can just skip to the sections that interest you, or read it all in order, you are best placed to decide what is waste and what is value.

Key definitions

Process– is a combination of method, machine, people, material and environment. The process transforms an object. This could be a piece of information or a physical part.

Value-added step– is a transformation that adds value to an object. I.e. it is a process that a customer will pay for.

Waste steps– a process that does not add value to an object and a customer is not willing to pay for it.

Wastes that are not wastes

You need to take care with some activities that appear to be waste but are important to the overall production process. Some examples of wastes that are not wastes are:

• Activities that join up processes. If an item needs to travel 100 metres between two machines, the travel does not add value to the part, but it still needs to occur. At some point you might move the machines closer together, but until then you need to carry on.
• Activities that appear to be wastes to you, but a customer may value, such as bedside manner, customer service, careful packing, manners …
• Unrecognised processes that are critical to the next activity. A part waiting in a queue may be cooling, warming, or drying for the next process.
• Activities related to compliance. Some customers are insistent that you fully comply with everything and are willing to pay for it. Others, not so much, and would be happy for you to cut corners if it saved them money.

Value-added steps that are not value

This is a longer conversation that will come out as we discuss the actual seven wastes. The understanding of value of your processes comes as you work on process improvement projects. With that better understanding you will be able to distinguish more clearly between waste and value.

That’s why I recommend starting with a simpler process improvement project, such as a waste removal activity. The act of process improvement develops your understanding of your production process, and this leads to the improved capability to tackle more complex improvements projects.

I’ll finish this section with a quote from Shigeo Shingo which encapsulated the thought that not all identified value-add steps add value.

                ‘It’s only the last turn of a bolt that tightens it- the rest is just movement.’ -Shigeo Shingo

The eighth waste

The seven wastes were developed by Toyota’s Chief Engineer Taiichi Ohno. These were a means of categorising different types of waste. Later, clever consultants added an eighth waste category- ‘under-utilising employees intelligence and creativity ‘.

The original seven wastes contribute to the overall production time of a product and can be measured. The eight waste cannot be measured and is what you try to utilise to reduce the seven wastes.

I’m not too precious about the eighth wastes and believe you should always use the right tools for the job. And sometimes that means you must adapt already existing tools without worrying about the purity of the theory. However, if you want to successfully adapt process improvement tools you should first understand the theory behind them. I think a quote from Pablo Picasso is relevant here

‘Learn the rules like a pro, so you can break them like an artist.’ -Pablo Picasso

The seven wastes

800 words in and I’ve just got onto the seven wastes, oh the irony!

Taiichi Ohno defined seven categories of waste. These categories are helpful in identifying wastes, as you can judge activities against the categories. It also can be used as an approach to tackling wastes, i.e. you could focus on similar transportation wastes. So, what are the categories and what do they mean:

Transportation

This is the movement of objects (materials, equipment, information) around your facility. This is necessary in most production facilities but is exasperated by poor equipment layout. Most businesses underestimate the number of miles a product has taken in its manufacture. If you want to look at transportation in your facility, try constructing a spaghetti diagram for a single product.

The solution to transportation wastes is to bring equipment closer together, so the end of one process meets the start of the next. This can be a big job and if you tackle each transportation individually you might make transportation worse for another part of the production. So, transportation should be tackled holistically by working out what is best for all products.

Motion

This is movement of operators whilst they are carrying out an activity. This includes finding, fetching, collecting, reaching, turning, bending and any other bodily movement. Some motion is obviously necessary, but motion waste is made worse by poorly designed work areas.

If you want to observe motion waste, go and watch somebody working (pretend you are there for some other reason otherwise they will change their behaviour). The questions are what are they trying to achieve and how are they going about it? If the activity is already efficient you may need to carry out a time and motions study of the activity to shave a few more seconds off.

In most businesses there has been no formal attempts to reduce the motion required to complete tasks. A simple method to reduce motion is to create dedicated workspaces for specific tasks and bring all required materials and equipment to within arm’s reach and having dedicated tools and equipment for that activity. There is nothing so infuriating (and time wasting) as having to find the communal spanner to complete a task.

Obviously there needs to be a cost-benefit analysis for this (even if it is just in your head), there is a big difference between a task that is required once a week and one that is done every ten minutes. Shaving 30 seconds off a regular task is better than 30 minutes off a rare task.

You should also consider the health aspect of any manual activity. Any improvement to a task should be designed to reduce stress and fatigue. Do not speed up a task whilst leaving in the bending, stretching and twisting.

Waiting

This can either be a person or a machine waiting. They can be waiting for numerous reasons, for a part, an instruction, a repair, a changeover, the end of a break etc.

Now this is the one that managers do spot, and always try and ‘fix’. They fix it with busywork (pointless work that does not benefit anything or anyone), or they feed the machine to keep it going (this makes things you don’t want and consumes raw materials you may need elsewhere, see over production).

How you approach reducing delay times depends upon the cause. If it is because of long tooling changeovers, you might consider a SMED (single minute exchange of dies) project. If it is a repair issue you need to consider a better equipment maintenance system. If the delay is due to lack of information you will need to consider better administrative systems.

If waiting is due to poor flow of parts around the product process, then you need to consider the operational design. It may be due to transport in which case see above, otherwise look at job design (what is the most efficient mixture of tasks for each operator), production planning (what is the most efficient production schedule), balance the production flow (use of batching, work-in-progress, inventory). Note- single piece flow is powerful goal, but it is not usually the first step in process improvement or even suitable for your type of manufacturing.

Waiting is usually a symptom of an issue elsewhere, don’t try and fix the waiting part, try and fix the cause. As a cautionary note, sometimes waiting is an important part of the process. As mentioned above a part waiting in a queue may be cooling, warming or drying for the next process

Inventory

Thinking of inventory as a waste is a tricky one if your job just focuses on production. The cost of having materials on the shelf or as work in progress, is not your concern if your goal is to just make quicker and better. However, if you add up the price of all the inventory you have on your shelf, including work in progress and finished products, it will add up to an eye watering number.

There is a direct cost of the inventory value in terms of interest on saving or debt, but there is also a huge opportunity cost. Ask yourself, if you could half your inventory what would you do with that money? You could invest it in expanding your capacity and capabilities leading to increased profits.

There are other costs to inventory. You need to store it, you have to pay for the warehousing, the racking, the insurance, the staff and the systems. There is also risk of inventory, you may lose it, damage it, break it or it may become obsolete.

Inventory does play an important role in your process. It allows you to buy in economic batch sizes and helps you level your processes. It also covers a lot of problems, unreliable suppliers, unreliable staff, unreliable process, and unreliable customers. To be able to reduce inventory you need to tackle these unreliabilities.

To restate, high inventory levels are a symptom of poor processes. Most people have heard of just in time (JIT) where your materials and components arrive just as you need them. You need amazing processes to be able to pull this off safely. DON’T SKIP IMMEDIATELY TO JUST IN TIME. As you improve your processes you can safely and gradually lower inventory levels.

Over processing

This is another tricky concept. You can think of it literally, as a part spending too long in a process, or that you are giving away too much quality.

For example, an item may go through a heat treatment process to dry it. If you continue to heat the item after it is dry you are just wasting energy. Drying longer than you need to does not add any extra value after the item is dry. So, any processing that is carried out longer than necessary is an over processing waste.

The same can be said about adding ‘value’ that is not required and not charged for. This could be providing more product than has been paid for, adding extra functionality for free, providing equipment with higher specifications, or a material with higher purity. Sometimes this may be a conscious decision, say if you are clearing surplus stock, or if it is cheaper to make the better-quality product. If this is something you always do, then you need to either work out how to stop or how to charge more.

You are quite often encouraged to delight customers. This is done by giving something extra for free (value). This ‘something extra’ should be something low cost for you and highly valued by your customer. It should be seen as a marketing exercise and should only be done as part of a marketing strategy and be fully costed.

Defect

Sometimes manufacturing goes wrong. When you think about it there are a massive number of things that can go wrong, and it is surprising that it ever goes right. When manufacturing goes wrong you make defective product.

It might be that a defect is not detectable on the shop floor, but your customer does, and then you have got an angry customer and a problem to fix. You may get lucky and spot the defect before it leaves the factory. In which case you have four options, 1) ignore it and send it out hoping the customer does not spot it, 2) tell the customer and negotiate for them to still accept it 3) fix it at your expense, 4) Scrap it.

None of these results are good, and the more defects you produce the more time and resources you have to spend to fix them. Defects can be very hard to prevent, especially if there are many causes and it can feel like you are in a pointless game of whac-a-mole. However they are lots of tools to help you identify causes such as SIPOC diagrams and ways of preventing them such as Poka-Yoke.

Over production

This is thought of as the worst of the wastes as it includes all the others. This is when you make more than you need, a customer orders 10 and you make 12.

Sometimes this is just practical, your raw materials may be inexpensive, and your equipment only makes in batches of 12. The most common reason for over production is that it takes a long time to shift production between different products. So, to be more ‘productive’ you make more of the product you are set-up for.

So why is this bad? Well to start with you are making a product nobody has ordered, all the costs of making it are spent but you have no immediate means of getting your money back. That money gets tied up as inventory. The time and money making product nobody has ordered could be spent on making something customers want. You also now have the costs and risks of inventory (as discussed above).

Like all of the other wastes, over production may be a necessary for your business, but it should only be done consciously and tactically to meet your business needs. There should also be a plan to reduce the necessary to over produce.

If you are looking to reduce over production, take a look at ABC analysis of inventory, and SMED (single-minute exchange of dies) analysis. The first will help you decide what to make to stock, and the second will help you reduce the time to swap between different products.

Skills (the eighth waste)

This relates to untapped talent and creativity of your workforce. What more value could they add to your business if they weren’t operating a machine. Well from a production point of view its irrelevant. If a person is paid to run a press and has the skills and discipline to run a press, and is running the press as required, then what business is it of anybody else if they also have other talents. If a person is not busy, it is likely to be a waiting issue not an untapped skill issue.

However, from an enterprise level you may have skilled people that could be better employed in different areas. This does not mean they are a waste in their current position, just that they could be used better. A second point is that these are the people you want to help with process improvement projects. Ask them to think about how they could make their jobs easier, then come back in a couple of weeks for some quality suggestions. Again, neither of these two points are wastes in a measurable and improvement sense, rather they are potential means to improve your business.

Uneven flow

I’ve discussed some of the risks and benefits of tackling the seven wastes. However, there can be a big issue if you solely focus on waste and that is unevenness.

When processes grow organically, the timings naturally fit to the rhythms of the business. Long processes magically become 16 hours (overnight) others coincidentally fit in with break times. When you start taking out wastes then these rhythms are disrupted, and work starts getting in the way of breaktimes. At this point the workforce might try to speed up some processes and slow others down. This needs to be managed carefully.

You may also inadvertently move all the difficult unpleasant jobs to one period. In the first year of applying process improvement techniques, I ended up moving most of the difficult jobs to Monday. Nobody liked working Monday, it caused stress and absenteeism. I spent the next year evening out the processes. The result was to compress what was a three-week process to three-day process, with workloads evenly distributed through the week.

Next steps

Take a look at your business, identify a waste and then tackle it. Process improvement is like a muscle, the more you exercise it the more it improves. For more information take a look at our Process Improvement page or get in touch and we can help get you started.