How to prevent running over budget, over time and deliver value to your customers.
Waste is the enemy of any process. By identifying and eliminating it, you can transform your company into a Leaner, and ultimately, a more profitable organisation.
Many activities which are routinely performed in production facilities add no value in the eyes of the customer. If these wasteful activities can be identified and reduced, or eliminated, then workflow and production capacity increases without an increase in costs for the business. This combination of improved customer service and cost competitiveness can significantly increase the profitability of the business.
Without wasteful activities, you add value to products and services by delivering to customers in the shortest possible timeframe, at a high quality and at minimum cost. World class companies profit from the knowledge that customers recognise and pay for value every time.
The Seven Wastes were first developed into a clear set of principles and rules nearly 50 years ago by Toyota Chief Engineer, Taiichi Ohno. The concepts recognise that waste drives high manufacturing cost and that waste elimination is one of the most effective ways to increase profitability in manufacturing.
To eliminate waste, it is important to look beyond the obvious examples of rejected components or full waste bins. The Seven Wastes recognise lost time, effort, cash flow and opportunity.
The Seven Wastes of Production:
- Over production
- Waiting
- Transportation
- Inventory
- Motion
- Over processing
- Defective Units
1. Over production
Over production involves producing goods over and above the amount required by the market at a given time. This consumes extra raw materials, labour and storage space, increasing the chance of damage to goods, excess handling and builds production queues which extends the lead time of goods on order. By limiting over production we can reduce lead times significantly and improve production flexibility and costs.
TIP: Over production can be avoided by using smaller batch sizes.
2. Waiting
Waiting involves periods of inactivity for people and product. Production lead time is tied up in waiting and queueing for the next sequence in the operation, typically when the flow of material, and information, people or equipment is poor. In a ‘batch and queue’ style process much of the time is attributed to waiting.
TIP: By improving material and information flow, optimising setups and changeovers and reducing the distance between work centres, productivity increases as the manufacturing cost decreases.
3. Inventory
There are many costs associated with holding excess amounts of inventory. This includes the direct costs of raw materials, work in progress (WIP) and finished goods stores, as well as extra handling costs, increased space requirements, more paperwork and possible product obsolescence.
TIP: To reduce inventory levels we can manufacture in small batches and introduce ‘pull systems’ to link production to consumption rates.
4. Transportation/Materials handling
Transporting product between processes is often viewed as “just part of the job”, however it adds no value from the customers’ perspective. Rather than improve the method of transportation the focus should be on the minimising or eliminating it from the process. Significantly, the number of material handling operations is directly proportional to the likelihood of damage to a product. Factory layouts are often the fundamental cause of excess transportation.
TIP: When a factory layout is carefully planned, through the use of mapping product flows and process relationship charts, it not only reduces transportation waste but can also reduce WIP and time.
5. Motion
The waste of Motion refers to any excessive movement by people or machines. For example, walking to and from tool boxes to retrieve items that could be stored at the point of usage, or bending to retrieve commonly used tools from an uncomfortable location. In CNC equipment cycles, sloppy programming can lead to the machine making unnecessary returns to maximum elevation during traverses or slow traverses even when not in contact with the work part.
TIP: Awareness of ergonomics (eg. bending, stretching) within the process has direct economic benefits. Analyse and redesign jobs with excessive motion with the involvement of plant personnel.
6. Over processing
Many organisations fail to ask what the customer actually values. As a result they perform work deemed unnecessary or even detrimental. The most common examples of this is unnecessary packaging, over-finishing parts, or specifying unnecessarily accurate tolerances.
TIP: By determining what it is that the customer is seeking and communicating this to staff with clear standards, inappropriate processing can be eliminated.
7. Defective Units
Processes not capable of producing the required specifications or quality are an obvious source of waste. The idea is to focus on preventing the occurrence of defects instead of finding and repairing defects.
TIP: Quality is improved through the use of standard work, training, 5S and continuous improvement tools.
Every organisation can benefit from a ‘Waste Hunt’. This involves creating awareness and understanding of the Seven Wastes within a Blitz team who identify and categorise wasteful activities that occur in the workplace. Once identified, they develop an action plan to address the most significant wastes and reduce or eliminate them altogether. Until you take the time to stop and objectively analyse the operations, you will never truly know how much opportunity exists.
