Tools: The Eight Wastes

You may have heard of the concept of “lean” manufacturing. The idea behind lean is to eliminate waste—i.e., get rid of all processes, steps and materials that do not add value—in order to meet customers’ needs as efficiently and effectively as possible. Lean principles fit everywhere, including all areas of the logistics and supply chain management (e.g., transportation, warehousing, information systems, and customer service). The Lean Institute and the Toyota Production System have defined the following process for implementing lean techniques:1

  1. Look through the Eyes of the Customer: Understand a product’s value proposition as the end customer sees it. What does the customer really want? Achieving the value the customer desires constitutes effectiveness.

  2. Eliminate Process Waste: Identify and evaluate all the processes in the supply chain for each product, eliminating all activities and processes that do not add value. Eliminating waste equals efficiency.

  3. Eliminate Wasted Time and Space: Eliminating wasted time and space between the value-added processes improves the flow to the customer.

  4. Repeat: Continuously revisit these steps until a state of perfection is reached in which the right value is created with no waste. Lean companies follow a continuous cycle of “Plan, Do, Check, Act.” However, in our constantly changing world, no one ever really achieves perfection.

Kiichiro Toyoda, one of Toyota’s early leaders, summarized, "The ideal conditions for making things are created when machines, facilities, and people work together to add value without generating any waste."2 Classic lean philosophy invites decision makers to avoid the eight wastes. Table 1.3 describes and exemplifies the eight wastes.3 Notice how the order of the terms describing the eight wastes have been arranged to spell “down time.”

Table 1.3
The Eight Wastes
Waste Definition Logistics Example Manufacturing Example
Defects Any work or product that is less than perfect.
  • Order that does not include every item on the invoice.
  • Order that is received early by the customer.
  • Scrap
  • Damaged parts
  • Product that does not meet quality specifications.
Overproduction Making more than the customer wants or than you have known demand.
  • Giving the customer more product than ordered.
  • Expediting an order that the customer does not need early.
  • Batch processing to meet “efficient” production order size rather than customer demand.
  • Using a “push” production system.
Waiting Idle/wasted time when resources are not ready/available to use.
  • Waiting at a dock or in a lot to unload a truck.
  • Staging orders to be shipped in advance of when they are needed.
  • Machines downtime awaiting for repairs, delaying production.
  • Shortage of needed materials/components delaying processing.
Not Utilizing Staff Talent Not challenging employees or listening to and encouraging their ideas. If this is blatant, employees can actually undermine your efforts to improve on the other seven wastes!
  • Not listening to suggestions of drivers/warehouse personnel regarding how to improve processes.
  • Not encouraging cross-training of employees.
  • People idle in one work station and behind at another because they are not cross trained.
  • Delaying production because the specialist who does a job is ill/on vacation.
Transportation Movement of materials or information that does not add value.
  • Transporting the same item multiple times with no change in the item.
  • Restaging products for shipping to move them out of the way when shipments don’t go out as sequenced.
  • Moving products to different locations for further processing.
  • Moving materials or packaging to be used in production to get them out of the way.
Inventory Excess materials that customers or manufacturing don’t currently need.
  • Holding excess finished goods in warehouses.
  • Carrying high levels of safety stock due to unreliable delivery lead-times.
  • Carrying extra raw materials to cover for defective materials or excessive scrap in production.
  • Ordering more materials than needed to get discounts.
  • Holding on to discontinued products or unused equipment.
Motion Movement of people that does not add value.
  • Unloading and reloading the same shipment to improve the cube utilization instead of planning in advance.
  • Backtracking in picking process (in DC) to fill orders.
  • Reaching or walking to get materials for each item rather than having materials come to you.
  • Repetitive movements that can cause injury.
Excess Processing Activities that the customer does not value and is not willing to pay for.
  • Excessive packaging
  • Providing paper copies of bills of lading that customer does not need because all is sent electronically.
  • Using more expensive materials that really do not improve the product in the customer’s eyes.
  • Buying a high-tech machine and using only some of the features because others aren’t needed.
  • Inspecting goods rather than doing it right the first time.

We have already mentioned a few ways that companies attempt to “cheat” the classic trade-offs by applying lean principles—whether they call them lean principles or not. For example, earlier in the chapter, we discussed Rue La La’s efforts to use previous order history to prevent people from ordering things that they will probably return. The goal: To eliminate the waste caused by excess transportation.

When eliminating the eight wastes, you need to take a holistic or systems perspective. Ask, "How does a change that you are considering to solve one problem affect other parts of the system?" For example, in the Rue La La example, if reminding customers what sizes worked for them in the past is done in an offensive manner, customers may choose not to place an order. Saving on returns at the cost of losing customers doesn’t make sense. If Rue La La can remind customers that sizes run differently for different brands and help customers pick the right size in a friendly, non-offensive way, then everyone wins. Waste is eliminated, improving the customer’s experience and Rue La La’s profits.

To effectively implement lean principles and eliminate the eight wastes, organizations usually hold Kaizen events (sometimes called Kaizen bursts). Kaizen events are gatherings of people who are involved in the day-to-day management of the process. They know how the process works and can ask two core questions,

  1. How can this process be improved?

  2. If we make this change, how will the rest of the process be affected?

Process mapping—creating an accurate depiction of a process complete with performance statistics—can make a process visible, improve the brainstorming process, help you identify opportunities for improvement, and define implementation plans.

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