Waste in Lean Manufacturing: Where to To Look and How to Reduce It

Taiichi Ohno, the founding father of lean manufacturing, identified three major roadblocks to a company’s work processes – Muda (wasteful activities), Muri (overburden), and Mura (unevenness). As such, any lean process today involves consistent efforts to eliminate waste in lean manufacturing. By cutting out or improving wasteful processes, organizations can reduce lead times and minimize total costs. The result is greater efficiency and improved profitability. But, what exactly is “waste” in lean manufacturing? When we talk about cutting out “waste,” which specific areas of the business workflow are we talking about?

Defining “Waste”

Waste in lean manufacturing is any activity that consumes resources but brings no value to the end customer. The reality is that in any manufacturing process or production line, the activities that truly create value for the customers are only a small portion of the whole work process. All the other processes that contribute no value to the process are called waste. Companies must strive to remove waste from their business processes as it allows them to identify opportunities to improve overall performance. At the same time, it’s worth noting that it’s impossible to remove all wasteful processes from your workflows. That’s because some wasteful processes are necessary for the grand scheme. For example, testing software isn’t an activity that customers will pay for. Therefore, it may constitute waste. But, testing is vital to the manufacturing process, right? Without testing, there’s a chance of delivering poor-quality products to your customers. Wastes are typically grouped into two categories:

• Necessary waste: Necessary waste includes tasks and processes for which the customer won’t pay but which are necessary to get things done in line with your goals. In manufacturing, these activities include planning, testing, and reporting.
• Pure waste: These are non-value-adding tasks and processes that you could do without. You don’t need them to achieve your goals. The most common form of “pure waste” is waiting, also known as “waiting waste.”

Areas of Waste in Lean Manufacturing

The original Toyota production process identified seven key areas for waste minimization or elimination (though an eighth area was recently adopted when the lean strategy reached the western world).

1. Waiting

Waiting is usually the easiest waste in lean manufacturing to recognize. It often means that goods or tasks aren’t moving. It could be goods waiting to be delivered, equipment waiting to be fixed, or a document waiting longer than necessary for management approval. These waiting times can quickly add up to cost the company significantly. Some of the areas you need to look at to minimize or eliminate waiting include process communication, forecast, process control, and idle equipment.

2. Inventory

What makes inventory a potential area of waste is the related holding costs. Consider raw materials, for instance. Purchasing more raw materials than you need (perhaps because of poor forecasting) can mean you need to rent more storage warehouses. It may also necessitate expensive transportation. As such, you should improve your forecasting so that you only purchase raw materials as and when needed. Reducing WIP and eliminating/minimizing “safety stock” can also help.

3. Transportation

Transportation wastes refer to when you move resources (materials), and the movement doesn’t add value to the workflow or the end product. This excess and unnecessary movement of resources can be very costly to the business. It means you spend money and commit labor to areas and processes that aren’t beneficial to your goals. A few areas to reduce transportation losses include batch sizes, number of storage facilities, and facility layout.

4. Motion

Motion refers to the movements by employees (or machinery) that are complicated or unnecessary. For instance, it may mean employees are accessing areas of the plant they aren’t supposed to access, or a machine is being moved from one point to another because of poor workstation layout. These unnecessary movements can cause injuries, prolonged production time, etc. Improving production planning, process planning, and reducing machine/equipment sharing can help address the problem and reduce these kinds of waste in lean manufacturing.

5. Defects

Defects affect time, money, recourses, and customer satisfaction. They can cause rework, lead to scrap, and come with additional exploitation of labor and tools. Examples of defects in the manufacturing process include lack of proper documentation or standards, poor design, and large inventory variances. A common way to address these challenges is by standardizing work at each production cell, ensuring formalized document control, and design change documentation.

6. Excess processing

Unnecessary processing is a sign of a poorly designed process. It’s often a management or administrative issue, especially where there’s overlapping issues of authority, duplication of data, or a lack of communication. It can also be caused by human error. The most straightforward way to minimize or even eliminate excess processing is through process mapping to optimize your workflows.

7. Overproduction

Overproduction means producing more items than are needed by the next downstream process. Some of the dangers of this include the “caterpillar” effect in the production flow. It may also create excess WIP as well as hide defects that may have been easily caught in a lean process. Overproduction may be caused by poor automation, unclear customer needs, and inaccurate forecasts. Address these three issues can reduce overproduction leading to reduced overproduction waste in lean manufacturing.

Finally

Eliminate non-utilized talent! This area of waste minimization was only adopted when the lean strategy reached Europe, but it’s still crucial. When you fail to utilize your employees’ talents fully, you end up missing out on their full potential. This is a waste that must be minimized as much as possible. Possible measures to address talent waste include proper training, improved management, and better communication.