Lean is all about improving process effectiveness and efficiency. So how do you do this the correct manner?
Is it about cutting corners and taking shortcuts or even speeding the process up?
The answer is none of the above. Lean is all about the RELENTLESS ELIMINATION OF WASTE. Therefore understanding what the 8 Wastes of Lean are paramount to success.
However what is waste? How do we know something is waste? Waste is essentially Non Value Added activities. The key to an effective system is
- Discover the 8 wastes of lean
- Develop strategies to remove or mitigate the 8 wastes of lean as much as possible.
In order to assist in finding these wastes, they have been broken down into 8 different forms which are described below. There is also a table at the bottom of this post that summarises them should you wish to jump straight down to them.
You will notice I have also arranged them in a certain order to form the anagram ‘TIM WOODS’ to make it simple to remember.
This refers to the constant moving of product or information within a system. This can be a tricky one as you will have to move product or information around. And while the product is in transport, no value added activities can be carried out. However how can you reduce the amount of movement? Wouldn’t it be great if we could just do a ‘Beam me up Scotty’ and they’ve moved instantaneously!
Unfortunately that’s not going to happen anytime soon, so this is about being creative. How can you reduce the movement, can you make improvements to the layout that optimises transportation? Can you carry out some work on a client site? Can you reduce the amount of information exchange between departments?
This is probably the most deadly of all wastes. With excess inventory, there is a good chance you will have other forms of wastes as it leads to so many other issues, wasted money, defects, overproduction and taking the chance that your inventory could become obsolete.
So why do companies like to hold on to excess inventory?
A lot of companies take a ‘Just in Case’ approach, better to have too much than too little or ‘Just in Case’ something goes wrong.
Can anyone see the problem with that approach or attitude?
If you think about it, people who take the approach are actually accepting and expecting bad quality in the system, so when it happens they have a safety net. That may sound great for a short term get of trouble situation. However, this is a chronic issue, if you don’t fix a problem, you can be sure it will come up again and again. Would it not be a better choice to get to a root cause of a problem so it doesn’t happen again, thus not requiring you to over supply on inventory and thus only spending money on what you need?
A good example of how this can go wrong. You buy in bulk, you build in batch (no flow), you hold lot so finished goods in your warehouse, you ship some product out and all of a sudden there is a defective part in the market. What do you have to do? Recall everything, check all stock at every stage in the process and you may not need to, it could have been a once off.
The cost of all that, producing product you don’t need, then discover the excess you have produced could be faulty, so you have to inspect the product you shouldn’t have produced in the first place. The amount of cost, resource and time involved in this can be huge and this is something I have seen many times industry.
Another reason why companies tend to hold too much is that Purchasing also get discounts for buying in bulk and commission. While this maybe good for purchasing, this is not good for any other aspect of your business. The more inventory you have in your system will mean more money tied up, more potential quality issues, longer production times which in turn will lead to longer lead time to your customers and harder to satisfy changing requirement and also the possibility that your material may come obsolete in the mean time.
So what is motion or excess motion? Probably the best example to describe this is using a TV remote control. Which is more efficient, having a remote control so you can stay sitting on your couch or having to get up every time, walk over to the TV and switch it.
While there are opportunities here, it’s probably not considered of huge importance in terms of time savings, however in certain industries where quality is of huge importance e.g. medical device etc, making the process as simple as possible can only improve the quality standard. Many people dismiss this waste, however we suggest you don’t. While not a top priority, always consider improvements in quality as well as time.
So how is waiting a waste? Well simply put, when you are waiting around, you are not doing anything to add value and generally means the system isn’t balanced. Whether is someone on an assembly line waiting on the previous step or waiting on paperwork to come through before you can process an order, it’s still waiting and nothing can be done until you receive the work load.
When workload is balanced, the flow is smoother, people and processes work in harmony, however we are also not robots so getting the perfect balance is impossible. Therefore goal is to create a system that strives towards a rhythm that balances the pace with which work needs to be completed with the right type and quantity of resources.
There is lots of hidden waste, hidden by processes due to waiting and hence it’s a great area to focus on as once you reduce waiting, it can bring other issues to the surface which then can be seen more clearly and therefore removed. You will achieve great reductions in lead times and improvements on efficiencies.
As the title states, this waste is about producing products or services that are not needed at that time. As mentioned earlier having too much inventory can cause other wastes. This is definitely one of them. Put it this way, if you only have the correct amount of inventory, you can’t overproduce and have product sitting in a warehouse or develop features in a piece of software that nobody wants.
Overproduction can also be a symptom of utilising capacity when customer demand is low and we still produce at the same rate in our balanced system. So what should you do? For starter don’t produce. It would actually be cheaper to tell your staff not to come in than come in and produce products or services that a customer wants. Alternatively you could brainstorm other activities that staff could carry out that would benefit the business e.g. training catch or cross training, factory clean or set up a 5S Program, problem solving, standard work creation / update or even Kaizen Blitzs. The key is to take advantage of the spare capacity while you can and with that it’s also a great opportunity to give your staff something different to do, some variety and engage them and this will only lead to a better relationship with them.
This can be a tricky one to get your head around and a lot overprocessing can be hidden and subjective. A good question to ask is, can you do things better or should you be doing better things?
A good example of this is multiple inspection points along a process. If the process was designed so it could only be done the ‘right’ way, would this not be a better approach? Is the customer willing to pay for you to inspect? Or what about multiple sign offs. There are many examples of where you could have up to 9 signatories on a validation sheet. What happens if someone is on holidays or off site, or, one manager won’t sign off unless another has signed before them. Can you see the amount of extra and unnecessary work that has been created here?
The KISS Model absolutely applies here
This can be tricky enough to identify in a production environment, however it’s even more difficult in an office environment when dealing with transactional processes. This one takes some brainstorming and engagement from your team and will require problem solving activities.
Again this waste is self explanatory. When you produce sub standard services or processes what happens?
- At best you can rework to get it right which will cost extra resources and time
- In the middle, you will create scrap so you’ve essentially paid for it to be produced and you are also paying someone to tell you it has to be scrapped.
- At worst, the defective product / service is discovered by your customer in the field which will lead to a borage of different issues for you business from reputation to loss of business.
So what is the best thing to do? Develop a process that will get it right first time.
Many companies always feel they need to speed up their processes to meet customer demands. The primary focus is always on yield throughput. However this is a great example of a KPI driving the wrong behaviours. Quality should always be the main focus. If its not, conduct a study to asses the cost of scrap and rework and determine whether it would be have been more efficient to take a quality first approach. Your process may not achieve the same throughputs, however you will be producing less products so in effect you process will turn out to be quicker.
8. Skills & Human Capability
This 8 Waste is a more recent addition to the previous 7 (it was formally the 7 Wastes). However people have come to realise without using the people on your ground, getting the best out of them, you will never uncover all the previous 7 and won’t even get close. Those people know your processes inside and out and in many cases have been there for many years. They have all the knowledge you need so should you not ensure these people are always treated with respect? When you truly get this one right, the opportunities are endless. This is all about treating your staff as valuable assets and about turning your organisation hierarchy on it’s head.
With that, its quite simple to visualise the issues. Everyone is different and want different things. So how do you create a culture of change and continuous improvement?
There are many different answers to this and lots of material online about Change Management techniques. The key to getting this right is about building up a trustful and honest relationship with them, engaging them and making them feel empowered. Treat them with absolute respect. Will you get everyone on board? Probably not and that’s not the goal. The goal is to create a solid foundation based on trust. Being slowly working on pilot projects and demonstrate to them that you value their opinion and give them the responsibility of making small improvements.