7 wastes of lean

The 7 wastes of lean (jap. muda) are the hidden costs of poor quality and management. Identification and removal of the waste is one of the most important principles of Toyota Production System and Lean manufacturing. The 7 wastes were first described by Taiichi Ohno, Toyota’s Chief Engineer. The wasted referred originally to production. The description of wastes in services was created later.

The waste is everything that doesn’t create a value for the customer. The customer wants good product. The company should manufacture if right first time without any additional costs. The customer doesn’t want to pay for additional transport, storage or quality inspection.

Types of waste

There are two types of waste:

  1. Activities that don’t add value for the customer, but are necessary.
  2. Activities that don’t add value for the customer and are not necessary.

The first type of waste doesn’t create value for the customer, however can be required by legislation or safety issues. The second type consists of 7 types of wastes.

7 wastes

1. Overproduction

In order to assure good product for the customer, organization can manufacture more products. E.g. the quality level is 95%, which means that 5 out of 100 products are defected. In order to sell 100 good products, the organization has to manufacture more than 105 products (100 / 95% = 105,26). This additional production is waste of resources.

2. Inventory

The organization wants to be prepared for large customer orders. Therefore, it keeps some finished products ready for shipping, some work-in-progress near the workplaces and some raw materials. All of these freeze the capital, that could be used otherwise. Any more inventory than required in order to keep the flow of the process is a waste. The organization should apply e.g. Just in time to reduce it.

3. Defects

Each defect has to be evaluated. If the organization manufacture defected products, it need quality inspection. Products that cannot be repaired are waste. But also products that can be repaired are waste, because of additional time of workers and use of machines.

4. Motion

Any motion in the workplace which extends time of production or stops it is a waste. E.g.:

  • searching for tools (see: 5S method),
  • searching for raw materials,
  • accidents during work.

5. Over-Processing

If the product has features that are not used by customers, creating them is waste. This should not limit creativity in design process, however the company should take into account needs of customers and evaluate which new features may create additional sales. Adding features that are not used increases costs of design, production, increases risk of defects. See also: designed quality.

6. Waiting

If the amount of raw materials and work-in-progress is too small, workers have to stop their work and wait. This waste is therefore related to 2. Inventory. However, there are also other situations when work is stopped, e.g.:

  • machines out of order,
  • wrong harmonization of work – workplace have lower productivity than one next in process.

7. Transportation

Each move of raw materials, work-in-progress or finished products creates costs. Moreover, it is an occasion to damage the product. The production floor should be designed in such a way that reduces transportation to the minimum. The first workplace should be close to raw materials. Distance between the workplaces should be as low as the place for processed elements (output from one workplace and input to another). The last workplace should be close to the place where products are sent to customers.

The 7 Types of Waste in Different Environments

Identifying wasteful activities is something that should start from the top of the company. Usually, high-level management has a broad overview of all processes. In this line of thought, we can say they manage a portfolio of different activities, functional areas, and projects, and it is their obligation to improve processes and spread a culture of continuous improvement.

However, wasteful activities may vary from business to business. In the following examples, you will see how particular types of waste may differ in various functional areas.

7 Wastes of Lean Manufacturing

  • Transportation – in production, it may mean moving parts and materials from one place to another
  • Inventory – undelivered products or parts. Overstocking with equipment that may be in need somewhere in the future
  • Motion – unnecessary movement of employees or machinery
  • Waiting – waiting for goods to be delivered
  • Overproduction – too many items produced “just in case”
  • Over-processing – Spending a lot of time on a given task. Adding a feature that doesn’t bring value
  • Defects – broken parts or defective parts that need to be reworked

7 Wastes in Software Development

  • Transportation – switching between tasks too often, countless interruptions from colleagues.
  • Inventory – undelivered code or undelivered features
  • Motion – unnecessary meetings or extra effort to find information
  • Waiting – waiting for testing to complete, waiting for code review, and so on
  • Overproduction – producing features that nobody is going to use
  • Over-processing – unnecessary complex algorithms solving simple problems
  • Defects – bugs

7 Wastes in Marketing

  • Transportation – task switching, interruptions, unnecessary long marketing funnel
  • Inventory – fully-prepared marketing campaigns which stay unlaunched. Licensed tools that nobody uses
  • Motion – unnecessary meetings, extra effort to find information, attending events without clear agenda
  • Waiting – waiting for approval from higher management
  • Overproduction – performing many different marketing activities without having a clear vision and strategy
  • Over-processing – generating countless marketing reports manually, while they can be automated
  • Defects – wrong brand communication, mistakenly branded materials

7 Wastes in Project Management

  • Transportation – task switching, interruptions, unnecessary long marketing funnel
  • Inventory – purchased online tools that teams rarely use, office supplies that exceed needs.
  • Motion – badly structured workspaces and lack of organizational paths, too many meetings, extra effort to find information, and so on
  • Waiting – waiting for approval from higher management
  • Overproduction -filling unnecessary great amount of documents
  • Over-processing – multiple levels of approval for small tasks
  • Defects – an incorrect collection of data

And now let’s look systematically at each one, as well as some ideas on how to eliminate waste and achieve the maximum possible efficiency in the process of production.

1.   Transportation – Don’t unnecessarily move products or materials

Unnecessary transportation is an obvious waste which is easy to notice. Transportation is defined for this purpose as the movement of products or materials from one location to other, the obvious thing being that transportation adds no value to the product.

In lean production, what we consider a transportation waste is when we are moving products that don’t need to undergo any processing. In addition to producing waste, every time a product is transported, it is at risk of being damaged, lost or delayed.

The longer the product moves around, the longer it goes without any value being added to it. Handling of the products is also part of transportation waste.

Transportation waste is most often caused by:

  • Having several production or storage locations
  • Poorly laid out production lines
  • Overly-complex production processes
  • Large batch sizes

The solution: you have to minimize all transportation in the production process and avoid any unnecessary steps between any two processes. There must be a good flow between the processes, and strict limitation of work in progress.

2.   Inventory – All the access products and material that are not being processed

Inventory or inventories are all the components, works in process, and finished products not being processed. Every piece of raw material, all finished goods, and every other item not being sold is actually a cost for a company.

Additionally, inventory is a cost because it has to be stored, and transported, and sometimes needs packaging. It can also be damaged.

Inventory waste might also be cash not used to generate income, space not completely utilized, paperwork which is unnecessarily stored, etc. The most frequent cause of excessive inventory is:

  • Overproduction of goods
  • Overspending on inputs
  • Inventory defects

The solution: Don’t store any extra inventory. Make purchases only when needed and in quantities that are actually required.

3. Motion – All movement of equipment not done in the easiest possible way

The waste of motion includes all movements that are not done as simply as possible. It’s similar to the transportation of products, but movement refers to the motion of equipment and operators.

We are talking here about people or equipment moving or walking more than is required to perform processing.

All excessive motion represents big stress. In business, there is a saying that even machines wear out. You want to save as much energy and resources as possible, even at the micro level.

Examples of motion waste in business are:

  • Non-ergonomic office layouts
  • Walking to deliver paperwork
  • Searching for things
  • Lifting heavy things etc.

Motion waste usually disrupts the workflow and delays the start of work. 

The solution: A good way to reduce motion is to follow the 5S system of organizing a workplace.

Try to simplify and optimize all motion in the production line, placing equipment nearby, providing an ergonomic workspace, and implementing visual signals so things are easy to find.

4. Waiting – idle production time where processes are not optimally synchronized

Waiting, also known as queuing, is another type of waste. It simply means waiting for the next production step or dealing with interruptions of production during a shift change.

When two interdependent processes are not synchronized, idle time is produced, and we have waiting waste. An example of this is waiting for an answer from another department so you can take action, system downtime, or waiting for shared equipment.

Waiting is most often caused by:

  • Poor process planning or layouts
  • Idle equipment or unplanned downtimes
  • Bottle necks

The solution: Optimize and connect all processes in such a way that the waiting time is minimized, and no time is wasted. The work should be standardized and proper production takt time introduced.

5. Overprocessing – Investing more into a product than customer values

Overprocessing means putting more into a product than is valued by the customer. The goal is to do only the level of processing that matches usefulness and necessity.

Similar to motion, this type of waste is very hard to notice and eliminate in business.

An example of overprocessing in production is painting unseen areas. Machines that are overprocessing because the whole process flow is directed through them are also an example of this kind of waste.

In lean, small is beautiful. Overprocessing can also be a result of unnecessary production steps, using older, outdated methods, or not having standard work plans. It can also be caused by slow approval process.

Overprocessing is most often caused by:

  • Unnecessary production steps
  • Using outdated methods
  • A Lack of standardization
  • Slow approval process

The solution is to match the level of processing to what the customer wants and is willing to pay for. Don’t do more, and avoid perfectionism in this regard, rather always have the customer in mind before you start to work on any task.

6. Overproduction – the waste of making too much too soon

The sixth type of waste is overproduction, which means producing more, faster than needed, or “making too much too soon”.

It’s the worst of the 7 since it also leads to other kinds of waste and devalues the need for constant improvement.

Overproduction leads to excess inventory, simply because it is production ahead of demand. Overproduction is usually based on the “just in case” mindset.

Many people think that inventory is an asset and has value, but in reality the value is very low or doesn’t even exist.

The most frequent causes of overproduction are:

  • Poor forecasts of market demand
  • Unpredictable production schedules
  • Lack of automation or poor automation
  • Long setup times for production

The solution: Switch from the “just in case” mindset to “just in time” production, by considering the overall takt time of a production line.

7. Defects – mistakes and errors that take time to fix

And finally we come to the last and most obvious type of waste – defects.

Every defected item requires repair or replacement, creates additional paperwork, and wastes resources, materials, and time. It can often also lead to loss of customers.

Most often defects are caused by:

  • A Lack of standardization
  • Inadequate quality control
  • Insufficient machinery repair
  • Poor communication
  • Human errors

It’s better to prevent defects than try to detect them. Examples of defect waste in business are missing information, errors, and client complaints.

The effort accompanying this type of waste consists of inspecting for defects, avoiding mistakes, and fixing defects as fast as possible. Standardizing all work and performing regular detection of abnormalities is the way to go.