Waste is not a popular word in the business world. But is it possible to avoid it happening? And how does one propose improvements so that it doesn’t occur again? The Lean Model is vital to increasing productivity and delivering better value to the final customer. The methodology defines and works with different types of waste and is adaptable for diverse business models.
Find out how to avoid the 8 types of waste identified by the Lean Method below:
1 – Defects and Rework
Defects and errors are major sources of waste in businesses, since they lead to rework. To re-do something that has already been done may require new investments in resources, raw materials, transport logistics, etc. The rework ends up increasing the cost of production, since it is not going to be passed on to the customer.
The idea is to focus on quality control, avoiding the flaws which become sources of error, and consequently rework.
2 – Surplus Production
A satisfied customer means money in the bank. This is not really true however. The efforts of employees, without a strategy to please the customer, can increase costs without necessarily delivering better value to the consumer. When a company implements a number of processes, particularly bureaucratic ones which cannot be perceived by the customer, it’s possible that they will increase the time and final cost of production.
To avoid over-processing, the organization must study its processes and workflows, measuring how much each activity influences the final result. It’s also necessary to analyze how much effort can be perceived as value by the final customer.
3 – Inappropriate Processing
There are flaws or limitations which affect processing. Production can stall or begin to develop a slow rate of progress. In this context, equipment ceases to work, other areas or sectors need to ‘put out fires’, to solve problems which were unforeseen. These new demands consequently require extra processes.
To avoid this type of wastage, it’s necessary to invest in maintenance and to guarantee that the team has the right equipment to develop their activities.
4 – Unnecessary Movements
This is the waste which occurs with the unnecessary transit of people. It happens when the employee needs to move in order to complete stages of development, such as participating in meetings in one of the corporation’s other buildings.
To curb unnecessary movement requires rethinking communication strategies, so as to avoid, among other displacements, those meetings which could be resolved with a well-written email.
5 – Transport
This type of waste occurs whenever there is any type of movement in order for the next step of the process to begin. It happens when it’s necessary to move products or people between locations. The right way, throughout processing, is for transport to occur in a single direction: towards the final customer.
It’s necessary to invest in logistics (i.e. transport, stock, etc.), so that there are no unnecessary movements. This avoids tracing conflicting routes between sectors or production lines.
6 – Surplus Stock
This occurs when a company produces products beyond their capacity for immediate sale. As well as requiring storage space, the surplus stock can be damaged, become obsolete with the passage of time, or exceed its expiration date, depending on the product that is being sold.
For the Lean philosophy, the ideal is to avoid holding stock beyond demand, both of the final product and of the raw material, as the damaging effects to the process are the same. Another issue is that the less stock there is, the less effort will be needed to resolve the case of a defective batch, for example. With reduced stock it’s much easier to resolve and repair potential damage.
7 – Intellectual (People)
This is the waste of human resources. It happens when an employee is underused, performing functions below his or her capability. Inspired professionals produce more and better, so wasted talents don’t have the same productivity. This type of waste is not as noticeable as others, but it has a considerable effect on productivity and the final quality of production.
Skills management can deal with this type of wastage by assigning employees in accordance with company objectives, thereby avoiding teams feeling crushed or empty.
8 – Wait
The final customer doesn’t perceive waiting time as value. For example, when the consumer orders a custom-made product, he or she knows that they are going to wait longer in order to receive an exclusive product of the best quality. On the other hand, the service of fast food needs to be in accordance with what is being proposed: the delivery of snacks in a very short period of time.
It is possible to eliminate waiting time which doesn’t add any value when there’s no disruption of internal communications. Synchronizing tasks and practicing prioritization also avoids wasting time reaching the final customer.
Now that you know how to avoid the 8 examples of waste which the Lean Philosophy identifies, you can access our e-book ‘The Lean Method: what it is and why you need to implement it in your company’.