Waste Elimination

Waste Elimination – The Central Theme of Lean

Are you aware that 95% of all the activities undertaken by traditional manufacturing businesses do not add any value OR in other words a waste??? Waste elimination is the central theme of Lean manufacturing. So, what is waste? Waste is defined as anything that does NOT add value from a customer perspective or the customer is not prepared to pay for. If we carefully analyse all the activities of a business, we can categorise them in to 3 types, Value-Adding activities (VA), i.e., which directly add value to a product or service, Non-Value Adding but Required (NVA-R), i.e., the activities do not directly contribute towards a product or service, but have to be undertaken for legal requirements or to comply with certain regulatory bodies etc and those which do not add any value at all, or Non-Value Adding activities (NVA) or in other words, “muda”, the Japanese term for Waste. Taiichi Ohno was the Toyota executive largely responsible for structuring and implementing the system over four decades after World War II, known today as the Toyota Production System and it was Taiicho Ohno who proposed the 7 deadly wastes in production. The eighth waste, Non-Effective use of Staff Talents was added later. 1. Defects - Quality defects prevent the customers from accepting the defected product. Defects, Rework, Scrap, corrections come under this category of waste. The defects are caused by Parts mismatch, forgotten parts in assembly, Scratches on parts (material quality), Spoiled parts, useless because dirty, or scratched, Poor Instructions, Lack of Training, Not following the right sequence, Lack of Maintenance. Defects Lead to waste of $$$ (costs escalate the longer they remain undetected), decrease in throughput and in some instances loss of customers. Solutions: Prevention prior to detection, Failure Mode Effects Analysis, Building Quality at source, Root Cause Analysis and Error Proofing. 2. Over Production - Making too much, too early or “just-in-case” (most serious of all waste). The reasons for Over Production are keeping the machines running, changeover times are high, requirement for buffer stocks, and production is NOT demand driven. Over Production Leads to a) Long lead times b) Long storage times c) Defects may cause products to deteriorate if not detected early and d) Excess WIP inventories that lead to physical separation of operations and discourages communication. Solutions: Implement Pull Systems and Supermarkets where required. Supermarkets are storage locations for WIP but with controlled stocks using minimum and maximum stock levels. PO Box 24499 Royal Oak Auckland Ph: 64 21 173 1060 Email: [email protected] Visit our Website: www.solutions4productivity.com

3. Waiting - Anytime materials or components are seen to be not moving in other words, materials or components waiting for machines or operators to work on them, operators waiting for materials or information, operators watching machines, waiting for tools, late delivery of materials or machines waiting for QA releases etc. Waiting Leads to Long lead times and $$$ not being processed Solutions: Reduce queue size, Point of Use Storage, deployment of Visual Systems, Improving Planning and Load Levelling. 4. Non-Effective Use of Staff Talents - Under utilisation of Expertise, Skills, Creativity, Innovation, Leadership, Motivation, Drive. Organizations employ their staff for specific skills that they may have. These employees have other skills too. It is wasteful to not take advantage of these skills as well. "It is only by capitalizing on employees' creativity that organizations can eliminate the other seven wastes and continuously improve their performance. Usually most businesses follow a top-down approach to drive change and do not utilise the staff talents. The change management is both a top-down and bottoms-up approach. Non-Effective Use of Staff Talents leads to lack of ownership by the staff and frustration. Solutions: Empowerment and giving the responsibility to the staff to manage their work areas. 5. Transportation Movement of materials and information. Transportation Leads to, Increase in lead times, $$$ for transportation source, directly proportional to the likelihood of damage and deterioration, Long distances = poor communication and poor quality (manufacturing or service). It is caused by WIP, Poor Layout, Large Batch sizes, Inadequate Warehousing systems, Too many inspections etc. Examples include Double handling, too many movements by forklift, use of long Conveyors etc. Solutions: Small-wheeled containers should replace forklifts, U shaped cells in place of long assembly lines where possible etc. 6. Inventory – Producing more than what’s needed by immediate customer or a down stream activity. Inventory, be it in the form of raw materials, work-in-progress (WIP), or finished goods, represents a capital outlay that has not yet produced an income either by the producer or for the consumer. Inventory leads to Low quality and low productivity due to a) Increase in lead times, b) Slow identification of problems, c)Increase in space thereby discouraging communication and $$ not being processed. Examples include, Inventory exceeding specified quantity limit, So much inventory at workplaces that double handling is needed, Excessive safety stock etc. Solutions: Adjusting the pace of production with demand, using Kanbans, moving to one piece flow etc. 7. Motion – Unnecessary Movement of people which does not add value and refers to the importance of ergonomics for productivity and quality. Motion is caused by poor layout, lack of standard methods, poor house keeping, poor process design, and nonuse of Point of Use Storage. Examples include, looking/searching for tools and information, bending, reaching, double handling, walking etc. Motion leads to improper utilisation of productive time, health & safety issues thereby operators becoming the victim. Solutions: Introduction of work-cells, shadow boards etc.

PO Box 24499 Royal Oak Auckland Ph: 64 21 173 1060 Email: [email protected] Visit our Website: www.solutions4productivity.com

8. Excessive Processing - Doing more than required which doesn’t add value from a customer perspective. Examples include more steps than required, Excessive paper work, Lack of clear communication, Lack of Standard Operating Procedures, Lack of understanding of what customer needs are etc. Excessive Processing leads to Unnecessary $$$, Discourages operator ownership, Leads to running machine as often as possible rather than only when needed, Encourages general purpose machines that may not be ideal for the need at hand, Poor layout (extra transportation, poor communication), Inevitable defects because machines and processes are not quality capable. Examples include, Variation between operators, Variation from standard, Having to use a “fast” machine shared between several lines Solutions: Think “small is beautiful”. Smaller machines avoid bottlenecks, improve flow, can be maintained at different times, and may improve cash flow and keep up with technology. Also challenge every step, activity and process to ascertain the need to have it and if everyone agrees that, it is superfluous eliminate it without compromising quality. Summary – It is hard to see these wastes for staff who have been working in organisations for a number of years. Therefore it is essential that, every employee of the business undergoes formal training in these eight wastes, so that everyone keeps an eye out for the wastes in whatever they do. The easiest way to remember the 8 wastes is to join the first letters to get DOWNTIME, which represents unproductive time. The trick lies in learning to see the waste(s) so that these can be eliminated.

PO Box 24499 Royal Oak Auckland Ph: 64 21 173 1060 Email: [email protected] Visit our Website: www.solutions4productivity.com