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THE SEVEN WASTES

Topics on Quality, Lean Manufacturing and Productivity

Improvement

Presented by

JORGE ROS

Lean Definitions

Waste: Anything other than the exact amount of equipment, materials, parts,space, and workers' efforts that are absolutely essential to add value to aproduct.

This is: Everything that increases production costs withoutadding value to what is being produced.

Value-Added: Anything that the customer wants and is willing to pay for it.

Non-Value-Added: Anything that the customer doesn't wants and won’tpay for it.

CUSTOMERS WILL ONLY PAY FOR THOSE THINGS THAT HE

NEEDS AND ITS USEFUL FOR HIM. ANY OTHER THING WE DO IS

A WASTE, A DISPEND OR WHATEVER WAY WE WANT TO NAME

IT.

¿WHO PAYS FOR IT?

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The Toyota Production System

The Toyota Production System definition states that it is:

“A philosophical approach to business that is based on satisfying thecustomer (internal or external) by producing quality products that arejust what they need, when they need them, in the quantity requiredusing a minimum of materials, equipment, space, labor and time (insummary: To eliminate wastes).”

Lean System Components

PHILOSOPHY: To Eliminate Waste, Human Development,Teamwork, Quality, Continuous Improvement, ProblemSolving, JIT, etc.

TOOLS: Kanban, TPM, 5-S, Mistake proofing, CellularManufacturing, One Piece Flow, Quick Changeover,Standardization, Value Chain Mapping, etc.

ACTION: Problem Solving, Brainstorming, Root CauseAnalysis, Implementation, Process Improvement Teams,Training & Learning, etc.

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Lean Philosophy Basics: for a new Culture

JIT - Build to order. Produce

only what is needed.

QUALITY - Don’t pass a bad

part to the next process.

STANDARDIZATION -

Standardize processes.

LEAN - Eliminate all waste.

CUSTOMER FOCUS -

Satisfy customer needs.

TRAINING - Everyone

knows what is normal or a

special variation.

COMMUNICATIONS -

Communicate all useful

information in a usable form.

Lean Philosophy Basics for a new Culture

PRODUCE WITH QUALITY –Think of a production system, not a quality system

INNOVATION - Try new ideas. Change. Improve.

TEAM WORK - Everyone participates. Management supports workers.

VOICE OF THE CUSTOMER - Learn from customers.

MORE TRAINING - Team training & Problem Solving.

KAIZEN - Continuous Improvement (PDCA).

PROCESS ORIENTED -Focus on the process not the results.

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1. Overproduction.

2. Wait Time.

3. Transportation waste.

4. Processing waste.

5. Motion/Movement waste.

6. Inventory waste.

7. Defects waste.

The Seven Wastes

Overproduction

Producing more products than is needed, faster than neededor before they are needed is a waste.

Adding extra units to the quantity needed “just in case” or building to apre-defined lot or batch size is also wasteful.

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Consequences of Over-Production

Loss of Production Control.

Fixing rejects becomes a low priority.

Increased Mix-ups, mistakes and confusion.

Valuable time and resources consumed (wasted) buildingproducts that are not a priority.

Overproduction Causes

• Poor Planning Process.

• “Just-in-case” instead of “Just-in-time” production.

• Poor communications between departments.

• Low Capability Processes, that are unable of producing the quantityand/or quality required in a consistent basis.

• Prolonged setup and cycle times.

• Sub-optimization caused by local optimization (Processes thatbenefits a single department’s interests against the organization’sinterests).

• Low equipment reliability.

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Wait Time

Wait time waste occurs when a worker cannot proceed withthe next task in a process.

There are workers waiting and doing nothing (wasting their time ormaking others waste theirs) while others workload is excessive.

Wait Time causes

Lack of an adequate maintenance.

Need of proper tools or materials.

Lengthy setup times.

Lack of cross training.

Lack of SOP or undocumented work methods.

Production bottle necks.

Irregular distribution of training.

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Consequences of Wait Time waste

• Personnel that cost doing nothing (adding no value).

• Delays that lead to overtime to conclude what was programmed.

• Costs due to inefficient processes that exceed the standard costs.

• Loss of motivation; Low morale.

Transportation Waste

Any material movement that does not directly supportimmediate production.

When product is transported to a place other than the next processlocation or, the next process is not located adjacent to the current one.

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Examples of Transportation waste

Units are parked off the production floor to gather a“full lot” for a batch operation.

Production Lots that are sent off to the other side ofthe plant for the next process step.

This can occur, either between operations or withinan operation where workstations are not properly laidoff.

Containers that are too big and difficult to open orclose.

Excess of material handling equipment. Lift-trucksthat travel empty.

Transportation waste causes

• Improper Facility Layout

• Large buffers .

• Large lot purchasing or processing.

• Poor production planning.

• Poor scheduling.

• Poor work place organization.

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Processing waste

Any unnecessary step, either production or communication,that adds no value to a product or service.

Occurs when we execute an operations, and the customer is not willingto pay for what is being done.

Processing waste causes

Lack of a concurrent design.

Processes poorly documented (Lack of SOP’s).

Lack of customer input concerning requirements.

Poor configuration control.

Quality Standards not related to customer needs.

Redundant inspections and approvals.

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Consequences of Processing waste

• Time spent building a feature that is irrelevant to thecustomer and that the customer will not pay for.

• Additional costs for materials used in excess.

• Lack of control because improper use of design documents.

• Products that either, exceed the requirements of thecustomer or fail to comply with them.

Motion/Movement waste

Any movement of people which does not contribute to add value tothe product or service.

Persons moving from one place to another create a false impression of beingworking, while in reality, are doing nothing. They are costing while adding novalue.

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Consequences of Motion/Movement waste

Employees move from one workstation to another, doingnothing.

They are unnecessary trips.

No value is added during this process.

Include time spent looking for parts, tools, fixtures, etc.

Include time spent going to/from a warehouse.

Motion/Movement waste Causes

• Ineffective Layouts (equipment, office and plant).

• Lack of Visual controls.

• Poor Process Documentation.

• Poor work place organization.

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Inventory waste

Any supply (Materials or Goods) in excess of what is requiredto deliver products in a Just-In-Time manner.

These parts will need to be processed, moved, counted, stored, etc. Willadd to costs and can not be shipped to our customers.

Inventory waste causes

Poor sales forecasting (Demand Forecasting).

Long lead times (set-up and cycle times).

Poor inventory planning.

Poor inventory tracking.

Unbalanced production processes.

Processes that can not produce the required quantity or quality ofproducts in a consistent manner.

Suppliers that can not supply the required quantity or quality ofproducts in a consistent manner.

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Consequences of Inventory waste

• Large lot purchases of raw materials, only to be stored for weeks or months.

• Very large WIP’s inventories.

• Low inventory turnover. Need of large working capital to finance inventories.

• Damaged Products.

• Obsolete products.

Defects waste

Costs due to sorting, repairing and/or repairing products.Include cost of materials scrapped due to defects.

Also consist in the cost of goods returned by customers, recallcampaigns.

Recycling part of the products is also a waste.

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Defects waste causes

Too many product models.

High inventory levels.

Inadequate tools/equipment.

Poor employee training.

Poor layouts.

Unnecessary handling.

Poor process documentation.

Processes that can not produce the required quantity or quality ofproducts in a consistent manner.

Suppliers that can not supply the required quantity or quality ofproducts in a consistent manner.

Consequences of Defects waste

• Excessive processing costs.

• Many additional non-value-added processes or operations.

• Additional quality control inspections needed.

• Damaged relations with customers.