A previous position gave me the chance to learn about Lean Manufacturing. I've learned a small useful bit of insight about how a company, team or operation can should operate to deliver value for its customers. The Lean philosophy is all about identifying and eliminating waste. One of the biggest challenges is for companies to first IDENTIFY the waste in their organization and processes. The biggest target is the shop floor, but all areas of the organization should be heeding this warning. This isn't just a shop-floor solution.
What Is Waste, Anyway?
Waste is something that the customer is not, or does not want to pay for. Waste can typically be categorized as either ‘necessary waste’ and ‘pure waste’. The necessary waste can involve processes that are required to get the order taken, the accounting processes done, the payroll completed, and the reports compiled. The customer doesn’t pay for any of that, but it’s got to be done. Certainly there are processes that can be improved within those necessary waste items that you find during a value-stream mapping exercise. The pure waste is the main focus of a Lean organization’s focus.
Seven Forms of Waste
Overproduction - making too much product before it has been ordered, or before you can invoice for it. Simple stuff. Only product when and until you need it. Don't batch your product. A solution often found for this form of waste is single-piece-flow. There are a myriad of reasons excuses generated for why a company/process/team cannot do single piece flow. The waste here is the wasted opportunity where you could have been building something else that could have been invoiced right away.
Overprocessing - only work on a product as much as it needs or as much as the customer wants. Do not polish the underside of a car. Do not give that widget 10 coats of paint if it only requires 2.
Inventory - typically this refers to raw materials and finished product. Having too much input and too many outputs not being shipped. Both of these tie up cash that should otherwise be sitting in your bank account. Produce the product at the last responsible time. Ship & invoice as soon as you can. This is a fine balance that can have you juggling with many variables (ordering lead times with multiple vendors, shipping schedules, lumpy customer demand, external dependencies, weather, etc.
Transportation - moving raw materials, in-process goods, and finished goods doesn't add value to the customer. They aren't paying for those trucks, forklifts, conveyors, and people - you are! This includes handoffs and transfers.
Waiting - imagine the assembly line. This is again the lost-opportunity scenario. Someone on the shop floor waiting for raw materials or their 'input' is a classic example. This applies to customers and vendors as well. Waiting for vendors who don't support you in the Lean philosophy can cost you time and money. Those vendors should be encouraged to accelerate/step up, or be replaced. We all have customers to serve, and we should strive to meet their demands.
Rework/Defects – don’t make something that isn't what the customer ordered. A defect may be a problem in your product that deviates from the specs, or is actually a hidden flaw. The later in the process that the flaws are discovered, the more expensive it will be to fix. This is totally non-value added, and you don't get paid to fix those defects. Rework is just as wasteful: fixing a processing mistake from an upstream process usually costs more than finding and fixing the problem upstream. Software developers and I.T. workers know this intimately.
Motion - the movement of people. If a worker has to travel outside a 6-foot circle (or some other subjective 'reasonable' distance), they likely are spending too much time not working on the product and adding value. This happens also when an often-needed set of files are located across the building. Same would apply to a printer, stockpile of supplies, or other team members!