Welcome to episode two of the Lean Smarts Podcast! I’m your host Daniel Crawford and this is the show where I share simple and actionable lean tips and advice for starting, expanding, and leading a lean life, and a lean organization. In this episode I’m going to explain what is regarded as the heart of lean manufacturing, which is eliminating waste.
I will be naming resources and making references throughout the cast, but you can always check out the show notes online for easy access to them. Just go to leansmarts.com/002 to find this episode’s notes.
The heart of lean manufacturing is eliminating waste from processes so that value to customers can flow at greater quality and velocity. In order to dig into this further it’s important that we define these two ideas of value and waste.
What is Value and What is Waste?
Value is defined by whatever the customer wants, and a value-added activity is any activity that transforms material or information into something the customer wants. For example, if I was purchasing a toy car, the value of the car might be defined by customers as having a windshield, four wheels that turn, and an elegant car body. The value-added activities might include: stamping the metal car body, gluing or attaching the windshield to the car body, adding two axles to the bottom, and attaching the wheels to the axles. Each of these brief moments in time are activities that transform that product into something closer to what the customer wants. The activities create value for the customer.
Waste is everything else. It’s all the extraneous efforts and activities that are lodged into the production process. It could be that the metal stamping press takes 45 minutes to setup. Setting up the press doesn’t create value. It could be that applying the glue to the windshield is difficult and prone to smudges and defects. Fumbling with the glue and creating defects doesn’t create value. It could be that 100 cars are assembled at a time and each activity is separated by individual tables or stations. Moving the 100 cars in bins from one station to another station 30 feet away doesn’t create value.
All of these activities are examples of waste. They may appear to be important and look like hard work. But these activities are waste. They don’t create value, because they don’t transform the materials into what the customer wants.
The heart of lean manufacturing is eliminating these wastes from the production process. If you’re not in manufacturing and instead in healthcare or a more administrative or service-oriented environment, these realities still hold true. Have you ever waited for a nurse or physician and been frustrated at how long it takes? Have you ever ordered a meal, scheduled a cleaning service, or taken your car to a mechanic and been frustrated by the quality, speed, or cost of the service? I’m sure you can answer yes, and the reason is due to waste in the process.
Learning to See Waste
If you’re going to become even remotely skilled with lean you’ve got to learn how to see waste. It is absolutely everywhere. The problem is that by default most of us are blind to it. We don’t see it!
If you were running the toy car company, conventional wisdom is to make the stamping press stamp faster, and get the gluing machine to glue faster, and get the wheels attached faster or try automating the process. We are suckers for focusing on the value-creating activities and trying to get them to perform faster. But in reality, the majority of time is wasted on all the extraneous wasteful activities of moving parts, cleaning up slop, counting inventory, reworking bad parts, setting up equipment, and the like. Customers experience delays and bad quality not because the equipment is too slow, but because your production processes are drowning in waste! If you could just eliminate the waste, you could deliver much better products and services.
But as I’ve said, you’ve got to learn to see waste first before you can begin to eliminate it. If you can’t see waste, you don’t stand a chance. But the good news is, anyone can do it.
It’s a common saying in lean circles that 90% of any process is pure waste and only 10% of it is a value-adding activity. The assembly of a toy car might only require 10 seconds of value-added content. You might guess that it takes 1 second for stamping, 2 seconds for gluing, 2 seconds for inserting the axles, and 5 seconds to snap on the four wheels. That’s a total of 10 seconds. But in practice it more like takes 100 seconds, because 90 seconds are simply waste! Instead of focusing on the 10 seconds of value-added activities and making them faster, you’d be much better off looking at the 90 seconds of waste and eliminating them!
Waste is everywhere, you’ve just got to learn to see it. And once you begin to see it, there’s no going back. You’ll see it at the grocery store, on the road, at home, at the gas station down the street, simply everywhere!
The Seven Wastes of Lean
The Toyota forefathers of lean had a special word for waste called muda. It even sounds distasteful when you say it. They categorized waste into seven mudas, and you’ve got to know them inside and out. The rest of this episode will overview each one. I’ll number them as I go so you can track with me, but the order isn’t important.
Waste #1: Motion
The waste of motion refers to the waste of human motion. I’ll use the example of a house painter. If you are a house painter, climbing up and down a ladder doesn’t add value. Dipping your paint roller into a bucket of paint doesn’t add value. Even taping off a wall with masking tape doesn’t add value. All these actions require human motion. You might argue that some of it is necessary. I’d be careful arguing that too hard, but regardless, it’s waste. Value is defined by paint on the surface, and none of these actions are accomplishing that goal. But they are incredibly time-consuming.
Waste #2: Transportation
Transportation refers to the waste of moving materials, product, or even information. Transporting stuff with a dolly, forklift, truck, or airplane is all waste. The materials or product in transit aren’t being transformed. They are only being moved from point A to point B. It’s time-consuming and costly, and it adds delays into the production or delivery process. Information can be transported too. Moving computer files, sending emails, or moving a work order or traveller through manufacturing can also be regarded as waste.
Waste #3: Waiting
It’s probably no surprise that waiting is a waste. No one likes to be made to wait. But we’re not just talking about people that are made to wait. Our focus is on things that are waiting and sitting still. Walk out into production and take inventory: how many parts are sitting on a shelf, a table, or in a bin just waiting? Look at your email client: how many emails are sitting in your inbox? Look at your desk: how many papers are waiting to be stored, shredded, reviewed, or moved? Waiting is wasteful.
Waste #4: Defects
It also shouldn’t be a surprise that defects are waste as well! Any product or service that is defective is a waste. If you have a manufacturing process with at 10% scrap rate, those defects are very wasteful and very costly! A proposal with errors or omissions is wasteful. A medical error is not only wasteful but tragic. Therefore, defects of all kinds are regarded as waste.
Waste #5: Over Processing
When you have a defect and then go to rework it, that extra processing–which is often called “over processing”–is wasteful! Nothing should ever have to be processed again. It should be done correctly the first time. However, you can also look at over processing as the struggle it takes to get something done correctly the first time. If an operator struggles to assemble two parts for 20 extra seconds because of how tricky the process is, you might look at all that fumbling and extra effort to get it right as over processing.
Waste #6: Inventory
Inventory is wasteful because it is costly and time-consuming to manage it. The more inventory you have, the more space you need, and the more time you spend moving it, counting it, and managing it. It spreads everything out and increases the wastes of motion and transportation. You also have the risk of material or information expiring or becoming damaged or lost. Right now this idea may sound risky and ludicrous, but it’s better to design lean systems that keep very small amounts of inventory, and then deliver that inventory just in time.
Waste #7: Over Production
This waste is regarded as the worst of all wastes because it causes or multiplies the other six wastes. Over production is whenever you make more of something than is needed or earlier than it is needed. The classic example is making something in batches. When things are done this way there is more motion, more transportation, more risk for defects, more over processing, more delays and waiting, and more inventory in the process. It’s a mess. I’ve got a fantastic example to show you too. Look for my paper airplane simulation video in the show notes or on YouTube to see what I mean.
Waste #8: Unused Employee Potential
I said there were only seven wastes of lean, and originally there were only seven identified at Toyota. Years later it was suggested that an eighth waste exists, which is the waste of unused employee potential. This is basically the waste of an under-engaged workforce. It’s one thing to employ someone’s hands, but it’s a total waste to not also employ their brain. As you get to know lean organizations, you’ll start to discover that they tend to have massively engaged workforces. Their people are world-class problem solvers and extremely creative. Anything less than this is a waste.
Well, that covers the eight wastes of lean! I do want to mention that sometimes these wastes go by different names. Don’t be alarmed! There are still the same eight wastes you’ve heard here today. For example, sometimes transportation is called conveyance or unused employee potential–which I admit is a mouthful–is shortened to just skills or talent. Don’t worry too much about what they are called, just make sure you understand their function.
This was a brief introduction. The next episode is somewhat of a bonus episode on this topic. I’m going to narrate three examples of how these wastes affect our lives, so stay tuned. In the meantime, I encourage you to visit the show notes for this episode to find some handy references to videos illustrating these wastes, and also a link to our free course on the eight wastes of lean. Just go to www.leansmarts.com/002 to find the show notes.