To get a world-class company it is fundamental to eliminate and avoid any waste (muda) in manufacturing and also service processes.
How can we describe “waste”?
It is any activity or process that adds cost but adds no value (for the customer).
There are 8 kinds of waste identified:
1) Overproduction
This is when the company is producing more than the customer requires. It can be the producing of items for which there are no orders or producing more than is immediately required. This is the worst waste as it multiplies all the other wastes. It increases defects, inventory, processing, waiting, unnecessary motion and transportation.
2) Inventory
Inventory is the quantity of parts on stock which are required to manufacture a product. These goods also causes costs to the company. When they are not used the parts take up valuable space, become maybe obsolete and requires raw material which cannot be used for more important goods. Competitive organisations make sure that their systems control inventory so that money is not wasted on unwanted goods.
3) Defects (scrap, rework)
Scrap and rework are required when products are defective and have to be reworked. Defects are caused by bad manufacturing processes (caused by human errors or equipment breakdown). Rework takes additional time and therefore increases the cost of the finished product.
4) Waiting
Each task in a manufacturing process is dependent on the processes upstream and downstream. If people, equipment, information or materials delay the production process, time is wasted and the cost of production will be increased.
5) Transportation
This is the unnecessary movement of information, products or items from one area to another. Unnecessary transportation is usually paired with unnecessary motion, product damage, loss of product, and systems to track the movement.
6) Motion
Not required motion relates to people moving around the work space wasting time and effort. All kind of unnecessary motion can be caused by poor standard work practices, poor process design or poor work area layout.
7) Over processing
Over processing involves taking not needed extra steps in the manufacturing process. It can also mean producing products of a higher quality than required. This may be due to malfunctioning equipment, errors in rework, poor process design, bad communication and not checking what are the customers’ needs.
8) Not used creativity of employees
This waste involves losing time, skills, ideas, improvements and learning opportunities by not listening to your employees. Employees have to be integrated into the complete manufacturing processes. So they can generate ideas which are needed to eliminate the other seven wastes. This will help to improve your processes continuously by using the available knowledge and creativity and it helps to increase employee satisfaction.