Identifying Waste

by theleanthinker

So what is waste?

Waste can be summed up as everything which does NOT add “value” to the end product or service. As a customer, anything which costs me money, but doesn’t add value to the service, I do not want to pay for. Hence why it is known as waste or MUDA (Japanese term). Waste is known to appear in 7 “Deadly” ways:

  • Transport
  • Inventory
  • Motion
  • Waiting
  • Over-processing
  • Over-Production
  • Defects

These are all forms of waste, as they provide no gain for the customer, however cost the company money. These extra costs are then off-loaded to the customer and therefore make the product/service more expensive than it could be.

Often these wastes occur as they become part of the everyday function of the factory. There is often a need to step back, and look at all the steps and processes creating a product/service, and evaluate which activities are value adding, and which are not.

So why should we reduce waste?

Reducing waste ultimately saves money. It also reduces cycle time, allowing smaller batch sizes and more customer flexibility. By reducing waste such as inventory it can allow for better factory utilisation. Reducing transportation of materials and motion of workers means more time can be spent productively, and workers gain better job satisfaction.

To summarise a quote from Akiko Busch:

“Make less, buy less, use less, throw away less.”

Source: “Reflections on Consumption and Minimalism” in Business Week