Where is the waste?
Take a tip. When you are next in the office, warehouse, hospital etc. just stand back for 15-30 minutes and observe. What do you see?
It’s an interesting question. Not surprisingly, not many people can categorically state what “goes on” in the environment in which you work. Why? Simply because, we spend all week in the same (or similar) environment and we are so immersed in our jobs that we fail to see what is happening around us. The operative word here is “see.” What we traditionally “see” are people walking around, information flowing from one place to another, trucks driving around, materials being moved from one place to another and so on… But! Which of these are actually adding value? More importantly, which of these is adding value to the customer? So, take this as a challenge – stand back and review what is happening. We guarantee you will be surprised.
What is Waste?
Waste, in Lean terms, is any activity that does NOT add value to the customer. How often are you kept waiting on the end of the telephone for someone to speak with? How long have you waited in the waiting room of a hospital? How would you react if the meal you ordered in a restaurant was not what you ordered? We could go on, but we guess you get the picture!
Here’s great example: We recently hired a car from a local hire company. The car was not great (they did not ask me what size I wanted) and on arrival, waited for over 25 minutes to be served. When (eventually) I was served and the formalities of payment etc. we organised, I then had to sign the agreement document. What shocked me was that I had to sign this form in SEVEN different places! When I asked why, the representative stated “It’s company policy!”
So, now you have observed, don’t be surprised if you have witnessed some or all of the following wastes, because I guarantee you (unless of course you have rigorous culture of continuous improvement) that these are in existence! So let’s look at the these wastes:
There are 7 recognised wastes:
Oh, you can add one more if you like – skills misuse. And the easiest way to remember these wastes – TIM WOOD (the initial letters of each waste, Tim Woods if you include skills misuse). Let’s look at them in a little more details and clarify exactly what we mean:
Transport is the movement of materials from one location to another. This is a waste as it adds zero value to the product. Why would your customer (or you for that matter) want to pay for an operation that adds no value? True, materials have to be transported from place to place, but the question is “why do we have to move materials/products so often?”
The countless times I have observed materials being moved several times before finally reaching its final destination is mind blowing! For example, at a distribution centre, the vehicle was unloaded and the pallet was dropped in the “receiving area.” Then, the pallet was moved to a “checking area.” the third step was to transport the pallet to a “depositing area.” Following (extensive) checking of the products on the pallet (extensive is putting it mildly) the pallet was then moved to the “replenishment area” waiting for location into its designated bay. Finally, the pallet was placed into its rightful place!
The above, I am sure is quite possibly an exception to the rule (or is it?) and most distribution centres would probably take half the time to locate the pallet into its resting place. Right? The real message here is that the number of unnecessary transportation of materials could be much greater than you think.
Stock takes! We all do them – usually once a year if not twice. The problem with that is that at the end of the financial year when stock takes are usually carried out is a bit like “after the horse has bolted.” How many times does the value of the inventory impact cash flow?
The trick is to manage your inventory according to the demands of the customer. Yes, forecasting can be useful, but it is just that – forecasting. Excessive inventory is a major contributor to inefficiency. It takes up valuable storage space, unnecessary resource to move and manage it and of course, if it sits there doing little else then that is cash tied up in the business with no return on the investment.
It is worth noting that inventory is not just pallets of beans, or sheds full of boilers (in the hope that these will sell quickly) but it is also applicable to everything that makes a business operate. I recall visiting a solicitors office to discuss improvement opportunities and while reviewing the processes, I looked in the stationery cupboard. What startled me was the sheer volume of Bic pens – all 70 boxes of them! I asked the obvious question “how come you have so many pens?” The response was “our buyer got a very good price for a bulk purchase.” Now, you know the follow question, right? “How long have you had this stock?” Reply: “well, he order 100 boxes about 6 months ago and we have these left!”
Primarily concerned with ergonomics, the waste that is associated with motion should not be underestimated. Whether it be accessibility to items in the office, consistent walking back and forth to obtain materials, information etc. you will surprised at the amount of time wasted.
Some simple tips include; moving the printer closer to the workplace; reducing the height of shelves to a more manageable level; filing cabinets close to the desk etc. Example: I observed an administration assistant who, during 2 hours, walked to the printer/photo copier 14 times. The distance travelled each way was just over 18 metres. Each return journey (excluding the time waiting for the printer to print) took 20 seconds. So, extrapolating that over an 8 hour working day means that she would have walked = 56 x 36 = 2,016 metres and 56 x 20 = 1,120 seconds (18.7 minutes). Remember, this for just one person and there were 18 people in the office who frequently used the printer/photo copier. Assuming the same applies to all 18 people, then the metrics are even more startling: 2,016 x 18 = 36,288 metres (22.5 miles) and 336.6 minutes (5.6 hours).
Just image reducing this by a mere 20%! You would save 4.5 miles of walking and 1.12 hours of time. How much would your productivity increase? How many more invoices could be processed in this time? How many pallets of products could be moved? How many more patients could be seen?
Top tip: Implement 5S to overcome these common, but not always obvious, wastes!
Over-processing is putting more into the product/service than is valued by the customer. The goal is to do only the level of processing to match that which is useful and necessary. Put simply over-processing is caused by non standardisation of best techniques/processes. This would include unclear specifications and unclear quality acceptance standards.
To put this into context, I experienced this waste whilst working with an organisation recently. The HR department had a strict policy on employee changes. Understandable indeed. The company used and EVF – Employee Variation Form – which had to be completed whenever a change to an employees’ details were to be made. The branch manager had awarded a pay rise to an employee. The process involved him completing the form (which took literally less than two minutes) from which he would send to his line manager for approval. Once this was completed, the form was sent to the regional manager and the regional HR manager for counter signature. When this was completed, the form was sent to the area director and area HR director for final approval. When this was completed, the form was sent to the payroll department where (you guessed it!) a further signature was added by the payroll superintendent. Then the change was processed.
So, it took 2 minutes to complete the original form but typically 8 weeks for the change to be processed! (Incidentally, it was 3 months before the employee actually saw this increase in his pay packet!). The good news is that the process was changed to remove a number of signatories, resulting in a turnaround time of less than 3 weeks (often less than that).
This is often a result of “Just in case” rather than “Just in time!” Large batch production is the root of this kind of waste rather than producing what is required when the customer requires it. Often considered the worst kind of waste as this tends to mask other inefficiencies within the working environment.
Working to forecasts is fine, but in reality, how often do you really produce a product or service when it isn’t yet required? The obvious downside to this is an unnecessary increase in inventory and the costs associated with this. In essence, it is about producing to much and/or too fast!
Theory of Constraints (TOC) (see separate blog) enables throughput to be improved whilst reducing the level of production to achieve this. What is the point of making 2000 widgets a day when demand is only 1000?
For defects read; errors, mistakes, faults and anything that is going to require REWORK. No matter which way you look at defects, it will always require some remedial action including a replacement or re-processing. Often, this waste is not always easy to identify – until it is too late.
Think of an iceberg. All you see is the apex of the iceberg, oblivious to what lies beneath the surface. The same is true of defects. The obvious defects/errors you see e.g. a car door does not fit or a document has not been signed but those that you do not see end up being seen by the customer – and that’s not good! So the message really is about building your processes that prevent the level of defects at source before they reach your customer and you have lost business.
ELIMINATING THE WASTES
It is not just a case of “Let’s get rid of the waste.” The whole aim is to deploy the Lean principles in order to create flow (one of the five principles of Lean). You create flow by responding to customer pull. Removing non value adding processes will facilitate a more efficient operation, make it easier to identify waste in the process from which you can significantly reduce your costs AND improve the customer experience.
Understanding your Value Stream will go a long way to understanding where any waste may exist and this relatively simple process can enable a great insight into how your operation flows. Value Stream Mapping (VSM) is a powerful tool to use when attempting to understand how your processes flow.
Author: Keith Parsons, director DembridgeTweet