ExcessĮxcess processing might be extra steps in a process, unnecessary customization, inefficient routings and other things not necessary or valued by the customer. Think of an extra twist of the wrist on every item many times a day that leads to a repetitive motion injury, with lost-time and disability costs. Even small non-value-added motion can be very costly. Tying up money in inventory limits opportunities to use funds elsewhere.Holding inventory costs money (estimate 20 to 30 percent carrying cost).The inventory may contain large blocks of nonconforming product that slipped through quality control.The product may go bad or become obsolete before the customer purchases it.The product made may not be what the customer ultimately wants.However, the waste aspects of holding large amounts of inventory are many: After all, a supplier never wants to be in the position of not being able to meet customer demand. If it looks bad outside, might it be bad inside? 6. Even cosmetic packaging damage may cause customers to reject product. The more times a product is transported, the more likely it is subject to mishandling and damage. In fact, transportation can sometimes even reduce value. From a customer perspective, transport adds NO value to the product. Transportation deals with unnecessary movement of products. The recommendation? Value people for their brains, not just their brawn. They may also have outside talents that aren’t formally part of their assigned jobs, but could be of use. Because operators are close to their processes daily, they can often recognize problems or opportunities that staff or superiors just don’t see, but the workers may never be asked for their input. Not fully utilized people represents the waste of talent present in many organizations. It can involve inefficient changeovers, poor communications, large batch processing, and uneven workstation loading. This may include waiting for authorization from a superior, even though the authorization is a rubber stamp rather than critical input. Waiting involves delays to process steps, often extending customer leadtime. This may not sound like a big deal, but it’s actually very important because it hides other elements of waste, such as undetected defects in runs of inventory, product damage from warehouse stocking and removal, defects introduced by high-speed processes, strain on human interaction with machines. Overproduction is making something too soon, making too much of something, or making something faster than is needed. Some experts estimate defects have a 10x negative impact on a company. Defects that actually reach the customer can cause greater pain, with loss of not only that customer, but many others from viral word-of-mouth dissatisfaction. Paperwork (including electronic) tracking for defects and waste removal isn’t free. In addition, the quality control system that must be put in place for an out-of-control process has high inspection costs. Concessions may be made to a customer or fire-sale pricing may be used so defective material can be sold. Keep in mind that downtime per se is not waste, but this acronym is a super way to keep from forgetting any of the eight.ĭefects involve scrap or material that is thrown out or reworked…and much more. We can use a mnemonic to remember each of the eight waste types: DOWNTIME. Operational excellence efforts first identify the contribution and systematically reduce and eliminate them. industry, a prompt to think about the value added by individual humans is a good reminder.Įvery process has each of these eight wastes, or at least the potential for these wastes. However, after decades of automation in U.S. Respect for People was already built into the Japanese systems as one of two key pillars for the Toyota Way (along with continuous improvement), so it didn’t need articulation as muda in TPS. In recent years, an eighth waste has been added to the list to ensure that organizations recognize the importance of not wasting the contribution humans can make to operations. Some use the acronyms of TIM WOOD or WORMPIT to remember each type of waste. In fact, Lean articulates seven different types of wastes identified in TPS. TPS uses the much broader waste concept of “Muda” as anything that does not add value in the eyes of the customer. The Japanese TPS system, upon which Lean is modelled, focuses on delivering value to the customer. In the old days of manufacturing, this might have been called scrap. One of the first steps in applying Lean concepts on a path to operational excellence is identifying and eliminating waste.
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