If you are somehow familiar with Lean, you may wonder why another article on the types of waste. First, because Lean wastes are most often described based on their application in manufacturing environments, where Lean originated. Second, as the business world is in continuous evolution, Lean wastes also evolve accordingly.
This blog does not only evoke the (importance of) new types of waste, but also focuses on their use in service and knowledge worker organisations.
However, before listing and describing the 17 wastes, I would like to remind you that spotting & fighting waste is not a synonym of cost reduction. According to Lean, waste is any activity that does not add value to the (end) service or product delivered to customers; and this value has to be considered from the customer’s perspective. This is most probably why Lean distinguishes waste – or Muda – in mainly 2 categories:
- Muda Type I : non value adding activities for customers but which are somehow necessary to produce the final product or service.
- Muda Type II : non value adding activities which are even not necessary at all.
You have got it: Muda type II should be eliminated without any doubt and as soon as possible. While removing Muda type I might only happen after a well thought-out consideration; making sure that the activity will not – either directly or indirectly – impact the quality of the end product or service, as required by customers.
8 DOWNTIME types of waste
You may ask why “DOWNTIME”. The answer is simple: it is just an easy acronym to remind the 8 basic types of waste; and moreover somehow related to the first waste described, i.e. defects.
Though Taiichi Ohno initially identified the well-known 7 types of waste, I prefer considering 8 basic ones, especially as the 8th one – (under utilised) human Skills or Talent – is actually one of the most important ones these days, especially for service organisations.
Defects can come out as an external failure, like after-sales repair – particularly while in a warranty period – or an unexpected, say abnormal, need for service. They may also be internal failures like rework and error corrections before delivery, scrap, delay, etc. One could generalise it by any product or service result falling outside the – either internal or external – norm or expectation; whether it is raw material, a part, ‘work in process’, or an end product or end service.
Some examples for service organisations are ‘bugs’ in software, medical or surgical errors, unattained Service Levels or dito agreements, etc.
Generally speaking, the later defects are uncovered, the bigger the damage will be. Hence the importance of preventing them by serious quality control of raw materials, parts or any activity upfront processing, and certainly before delivery. Wherever possible, apply the “Do it right the first time” principle, and where there is a risk for mistake, foresee error-proofing or poka-yoke; but an organisation should also register every defect and – either internal or external – complaint, so to analyse (root-)causes and to take action to avoid it in the future. Indeed, any defect should be considered as an opportunity to improve.
An even more interesting concept and practical tool to deal with any defect or error is the Lean “Auto quality matrix” (read more on this at the end of this blog).
Overproduction means delivering too early or too much. One may wonder why ‘too early’ is an issue for the customer. Well, imagine that you are in a restaurant, still enjoying your first course, while the waiter brings the main course already; is too early not bad in such a case?
Otherwise, delivering too much means that it will cost your organisation more, and that you might satisfy your customers even more with providing less, but at a lower price.
But also when considering your own (internal) organisation, overproduction has other negative effects, like disrupting the smooth Flow of (process) activities, thus making your internal processes less efficient. Hence, the importance of applying Pull whenever possible, so to deliver what is asked, and not more.
Some typical examples of Overproduction in Services are: providing information (e.g. e-mails or reports) when they are not requested or have no value for the recipient. Or when the information is provided too early, and might even be outdated by the time the recipient will really need it.
When either customers, or own employees or even machines or systems need to wait, this is a waste – of time and money, as time is money. This is why Flow is such an important Lean principle: each time that an object or item is not moving through the value stream or business process, it may be considered as a potential waste, indeed.
Examples of waiting in Service environments are customers waiting (for too long) to be served, or employees waiting because of downtime of a system, or even when an IT-system or the network is too slow, etc.
In the ‘good old time’, organisations keen on operational excellence measured times manually to register the main time wastes in their processes. Luckily, Process Mining these days enables to uncover (abnormal) delivery times or processing times, while spotting for potential improvements.
4. Non-utilised human skills, talent, or creativity
This is the so called 8th type, which was not yet mentioned by Taiichi Ohno, while – to my opinion – it has become the most important one, particularly in service companies and even more especially in “knowledge worker” organisations, where human capital is the highest valuable resource; and the most expensive one as well.
Since there are lots of aspects to tell about this “people management” type of waste, I will spend an entire blog on it, including suggestions to minimise it.
Some fundamental – but unfortunately still too frequent – examples are the wrong job for the employee, limited responsibility for competent people, not stimulating (or even worse, not allowing) employees to develop skills, etc. You will read more on this topic in next blog.
Even though this may seem a typical physical, thus manufacturing type of waste, it is also perfectly applicable to Services organisations. Not only there may also be physical goods in a Service company; this type of waste may also relate to the transport of people. E.g. the transport of patients in a hospital, a resting home or any care providing organisation.
To say nothing about transport of intangible items, e.g. information, knowledge like – either paper or electronic – files.
The modelling of processes or value streams, but also of an item’s overall life cycle certainly helps to identify transportation and to assess its value. Think of algorithms of dispatching software that were developed thanks to regular improvement analysis of applied routes on the road. But spaghetti diagrams – or spaghetti plots – are also usable for internal transport. A sport coach told me that he monitored the efficiency of his team by analyzing the movements of the team players during a competition while they were provided with a discrete, very light positioner. By the way, a feature (geolocation) which you find on each smartphone these days, and that offers lots of perspectives for process improvement thanks to the Internet of Things; a topic for one of the future blogs as well…
Also inventory makes us spontaneously think of tangible, physical goods – like raw material, work in progress or end products. And indeed, too much or too large physical inventories do not only cost because of the expensive space they use, though also cause of the money tied up in those and their risk of obsolescence.
However, which organisation is not challenged these days by information (storage) overload? Even as an individual, I tend to keep too much data – e.g. too many files on my hard drive or too many e-mails – assuming that I will ever need these again. Notwithstanding data storage is rather cheap nowadays, the side effect is the challenge to swiftly find the information back when needed. Probably one of the biggest challenges of ‘Big Data’ that the Internet of Things will provide; even though Data Mining will help to lead the data consumer to the right information in decision.
This is obviously a more human – and layout – related type of waste. It is not only about inefficiency – like the number of meters or miles one has to walk per day -, but it is also about ergonomy and micro-movements, thus taking care of the health of your employees.
Some typical examples, obviously also – even especially – for Service organisations, are the ergonomy and layout within the office, as well as the user-friendliness of screen layouts of software applications, so to minimise the number of clicks needed to achieve administrative tasks. This does not only enable productivity increase; it also decreases the risk for RSI (Repetitive Strain Injury).
8. Extra-processing – or “over-processing”
Extra-processing means qualitatively doing more than necessary. While overproduction (number 2 here above) relates to providing quantitatively more than requested, extra-processing involves doing more work – resulting in more expensive products or services – than the customer expects; at least when s/he does not require this extra-processing and will not be delighted by it.
Imagine that your customers would be happy with a Service Level like a response-time of 24 hours after their call. If (trying) to reduce the response-time to 1 hour would cost you much more, wouldn’t it be a waste to do it? Particularly when your customers are not willing to pay any cent more for this shorter response-time.
Some more (new) types of waste
Since Ohno’s initial types of waste, other organisational aspects deserve attention as potential waste, especially for Service & Knowledge workers organisations:
1. Monuments or inappropriate systems: the term “monument” in Lean has a quite negative meaning, referring to equipment or systems that contribute to waste (impeding flow) by their lack of flexibility and which are very difficult (or expensive) to move or to replace. Also IT-legacy systems, or even more recent but inflexible ERP-systems may be considered as monuments, particularly when they are not (more) appropriate; these are then a source of inefficiency and cause a waste of time in its many forms (processing time, throughput time, etc.).
2. Energy, water and natural resources: particularly in this current era of high pressure on Mother Earth, including climate change, there is no need to stress the importance of being efficient with this kind of resources. Organisations considering Lean as a philosophy rather than “just a tool” also keep the use of these resources to a minimum. Not only in the processes delivering products or services, but already from their conception, i.e. from the R&D processes. So that the product or service delivered consumes as few as possible energy, water or natural resources during its utilisation. And so that after consumption of the service or the product, a minimum of waste (water) or CO2 – or whatever polluant – remains.
3. Variation: like already explained in previous blogs, variation is one of the biggest enemies of operational efficiency. This is even the main purpose of 6-Sigma: to narrow standard deviation curves as much as possible.
4. What Bicheno & Holweg call “No follow through” – say the lack of consistency or coherence. One of the most frequent “misuses” of Lean, being the hunt for FTEs (Full-Time Equivalents) to actually fire people, is a typical example of how it should not. Indeed, though you may save money on wages in the short term, by firing (motivated) staff member, you throw valuable knowledge and experience away. The better way is to consider how to use the freed time and personnel to spend those to higher value creating activities.
5. Duplication or redundancy of information, data or of work: re-entering data or repeating the same work at several moments – for a same product or service unit delivered -, while it could be done in 1 time is clearly a waste as well.
6. Unclear communication: communication, whether it is internal, or with customers or suppliers, should be as clear as possible, so to avoid confusion and misunderstandings; but also to limit the time spent by anyone to clarify things.
7. Poor – or even incorrect – reporting: needless to mention that accurate, up-to-date information is essential for taking good decisions. As well at operational, as at (top) management level. Poor – and even worse, incorrect – reporting leads to non-optimal, even wrong decisions, and thus relatively high wastes of money, materials, time, etc.
8. Service transaction errors: any kind of failure during service delivery costs time and money. Though you may wonder why this is not the same as a “defect”, it is a fact that while executing service tasks at – or under way to – a customer, many more things may go wrong than in a more easily to control manufacturing plant. Hence, involving and training – even educating – customers is even more important in service transactions to prevent failures than traditionally for products. Most of the banks (if not each one) offer online banking services these days; but they warn (read ‘educate’) their customers to be careful, e.g. having anti-malware installed on their device, being alert for Phishing, etc.
9. Opportunity loss: it is no news that it costs much more time and money to convince prospects to become customers than to retain good customers. Hence, losing customers or sales opportunities by ignoring them, or due to unfriendliness, rudeness, etc. is also a not negligible type of waste.
Do you want to get acquainted with the Auto Quality matrix to boost your quality management? Please write in below Comment box about any of your experience with Lean wastes – or Lean, or process management, in general. You then will receive a useful and easy to implement whitepaper explaining how to apply the Auto Quality matrix, including some examples to illustrate how you could use it in your organisation.
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