Understand the “7 wastes” a company can have

One of the foundations of the lean system, or lean mindset, is the search for the waste that can occur day to day in a company. The concept is extremely simple: waste is anything that consumes resources but does not add value for the customer. The hard part is eliminating it.

A big problem with waste is that, in the vast majority of cases, it stays hidden in the middle of production processes. And since finding it is obviously the first step in fighting and eliminating it, this is often not the simplest of tasks, because waste disguises itself in many different ways.

Confusing processes mix useful work (which adds value) with waste, perpetuating “old” ways of doing things that are “inherited.” People are always busy and come to consider extremely inefficient ways of doing the work “normal” or “acceptable” – simply because it has always been that way.

A good tip for fighting this is to try to visualize the “7 types of waste” that can occur day to day in a company. This is a concept pioneered by Taiichi Ohno (1912-1990), one of the leading executives in Toyota's history, considered one of the creators of the automaker's innovative management system that gave rise to the lean philosophy, and the author of several books on the subject.

So let's try to understand the “7 wastes” set out by Ohno:

1. Overproduction

This is when the company produces more than it needs to serve the customer. Each step should produce exactly, no more and no less, what the next process asks for or requires, so that the value chain meets real demand. It is the “mother” of all wastes, because it ends up aggravating all the others. Producing in a greater quantity or at a faster pace than necessary uses resources unnecessarily, generates inventory, movement, etc., consuming capacity that should be used to make what the customer wants.

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2. Waiting

The ideal of the lean system is for all processes to take place in continuous flow, delivering quickly to the customer, without interruption. This waste occurs when someone or some piece of equipment that should be producing is doing nothing. Idle people, idle machines... a major inefficiency. Look carefully at any workplace, whether the shop floor or the office. It is easy to see people waiting for materials, information, etc. This happens much more often than it seems. One of the main reasons is instability and imbalance between steps, which cause the “stop-and-go” along the entire chain.

3. Unnecessary processing

This is when, in order to produce something, we carry out actions that did not need to be done. Even if they were eliminated, they would not be missed in the least. For example, people checking things that have already been checked before. Or processes that made sense in certain situations but were kept even after conditions changed. For example, cosmetic treatments on parts that are not visible, protections that were necessary when parts waited much longer in inventory, holes drilled for accessories that are no longer used, etc.

4. Inventory

Products or services are made to be consumed. That is how the company serves its customers and earns its revenue. If what is produced is not consumed – whether by the end consumer or by the next process in a production chain – we have inventory, one of the main indicators of a system with problems. The financial cost of idle, unsold capital is the most obvious waste. But inventory hides several other problems, for example by delaying the detection of defects, often leading to rework in large batches.

5. Transportation

Anyone who works in logistics knows the effort and cost involved in moving materials in an organization – whether internally or externally. So any kind of transportation that could be avoided is a big waste. This happens, for example, when raw materials are moved around inside a factory unnecessarily, as a result of broken flows, intermediate inventories located far from the production lines, and inefficient supply schemes.

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6. Motion

Similarly, unnecessary movements of people are also waste: they consume time that is not being used to produce, to create value. Ideally, every movement a worker makes should be used to produce, to create value. For example, searching for a tool inside a factory is a waste of time. Or workstations that are far apart, resulting from layouts that accommodate huge inventories between operations and that require people to take many unnecessary steps, many times over, to the point of walking kilometers in a day.

7. Correction

The ideal in a production process is to produce things right “the first time.” That way, of course, there will be no need to produce them again. The seventh waste identified by Ohno is one of the most common in traditional organizations: spending time, people and resources to redo, correct or rework what was done

incorrectly. This involves a series of wastes typical of production processes riddled with failures: the need for inspections, handling of scrap, etc.

The examples are many and varied. They will depend on the type of company, the product, the service... but these are the most common wastes.

So now it's your turn. Shall we roll up our sleeves? Which of these 7 wastes occur day to day in your organization? Making everyone aware that these wastes exist and creating a sense of dissatisfaction with them are the first steps toward eliminating them.

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