How to identify areas of waste that are costing your business

The original 7 wastes were identified and defined by Taiichi Ohno, the lead engineer in Toyota. The 8^th waste was later added to include the waste of human potential. By identifying waste and utilising Lean principles, you can impact key performance indicators in your business. Improvement in quality leads to reduction in costs. These, in turn, impact on your internal and external delivery times.

How do we define waste?

Waste is defined as any action or step in a process that does not add value to the customer. In other words, waste is any process that the customer does not want to pay for.

So where do areas of waste lie?

 Over-production

Typically, over production refers to producing more stock than is requested or needed by a customer, but can also mean producing the stock too early or ahead of schedule. Issues arise here such as additional storage costs for excess stock. Overproduction can also occur when a staff member spends too much time on a task or project.

Inventory

Inventory waste means large stocks of raw material or work in progress in work areas. Work areas such as an individual’s desk cluttered with materials making it more difficult for said person to do their work.

Transport

Moving or handling of parts or equipment unnecessarily due to excessive inventory or poor factory layout. Think about the flow of work within your organisation, are there any delays, for example, is the printer far away from the desk?

Process

Process defines any work that is done in a process that is not necessary. It also includes any process that is more complex, expensive or time consuming than required. When your employees sit down to do a task, do they have all the tools they require to perform the task most efficiently? (e.g. a graphic designer will need the Adobe suite, a sales person needs a phone). Another example of process waste is a senior person doing a task that anyone in the organisation could do.

Waiting, Idle time

This might be the most self-explanatory, how long does a customer wait to receive the product? Idle time often occurs when a machine requires monitoring, or if multiple areas in a warehouse rely on just 1 person to keep them running. This can apply to various projects in an office environment with bottle necks, e.g. the approval process, waiting for someone more senior to sign off your work.

Motion

This means any unnecessary or excessive walking, bending, turning or reaching during the process, aka any unwanted moving during a process. This may seem similar to transport but it directly refers to the damaged that the production process inflicts on a product through unwanted movement.

Defects

Defects, or faulty products, costs a business time and money - the time wasted by having to re-work, scrap or correct any information. Replacing faulty machinery costs money, but also idle time - waiting to order the new part and install it. Having a process for regular checks on machinery or documents will reduce the risk of faulty products.

Underutilised skills

This occurs when an individual’s ideas and creativity is ignored. We’ve all heard the saying ‘but we’ve always done it this way’ which is a very dangerous concept. Using employee’s ideas and creativity could see better ways of working, and a more productive environment.

Learning and implementing Lean

Utilising Lean principles can give you immediate results. Simple changes, positive improvements and using the expertise of you and your workforce can gain you quick but lasting wins.