
The idea of eliminating waste originates from the Toyota Production System. Taiichi Ohno, who is considered as one of the founding fathers of lean manufacturing, dedicated his career to establishing a solid and efficient work process.
During his journey, Ohno described three major roadblocks that can
influence a company’s work processes negatively: Muda (wasteful
activities), Muri (overburden) and Mura (unevenness).
In Lean, waste is any activity that consumes resources but brings no value to the end customer. Based on his observations and deep analysis, he categorized the 7 types
of waste (7 Mudas), which later became a popular practice for cost
reduction and optimizing resources.
1. Transportation
This type of waste is when you move resources (materials) and the
movement doesn’t add value to the product. Excessive movement of
materials can be costly to your business and cause damage to quality.
Often, transportation may force you to pay additionally for time, space,
and machinery.
2. Inventory
Excessive inventory is often the result of a company holding “just in
case” inventories. In such cases, companies overstock themselves in
order to meet unexpected demand, protect from production delays, low
quality or other problems. However, these excessive inventories often
don’t meet customer’s needs and don’t add value. They only increase
storage and depreciation costs
3. Motion
This kind of waste includes movements of employees (or machinery)
which are complicated and unnecessary. They can cause injuries, extended
production time and more. In other words, do whatever is necessary to
arrange a process where workers need to do as little as possible to
finish their job.
4. Waiting
This is probably the easiest waste you can recognize. Whenever goods
or tasks are not moving, the waste of waiting occurs. It is easily
identifiable because lost time is the most obvious thing you can detect.
For example, goods waiting to be delivered, equipment waiting to be
fixed, or a document waiting for approval from executives.
5. Overproduction
Having in mind that waste is anything that the customer is not
willing to pay for, it is easy to realize why overproduction is Muda.
Producing more means that you exceed customer’s demand, which leads to
additional costs. Actually, overproduction triggers the other 6 wastes
to appear. The reason is that excess products or tasks require
additional transportation, excessive motion, greater waiting time and so
on. Furthermore, if occasionally a defect appears during
overproduction, it means your team will need to rework more units.
6. Over-processing
This type of waste usually reflects on doing work that doesn’t bring
additional value or it brings more value than required. Such things can
be adding extra features to a given product that nobody is going to use,
but they increase your business costs. For example, if a car
manufacturer decides to put a TV screen in the back trunk of a vehicle,
probably nobody will use it or find value in it. Even more, it will cost
resources and it will increase the end price of the product for
something that customers are not willing to pay for.
7. Defects
Defects can cause rework or even worse, they can lead to scrap.
Usually, defected work should go back to production again, which costs
valuable time. Moreover, in some cases, an extra reworking area is
required which comes with additional exploitation of labor and tools.