THE 8 FORMS OF WASTE
“There is nothing so useless as doing efficiently that which should not be done at all.”
– Peter Drucker, American Strategy Guru & Author
Let’s do a simple exercise. Think about your last full day of work. What did you do during the day? What percentage of your time was spent creating value for your organization?
Sorry to put you on the spot. If you were creating value every minute of your day, you are in a very, very small minority. Think about other people in your organization. Can you think of a few that aren’t pulling their weight? For the organization, every minute you or your colleagues aren’t creating value is a form of waste. Even worse, is there a lot of work you and your colleagues do that is busy work or creates even more non-value add work for others?
In Jeffrey Liker’s book “The Toyota Way,” he asserts that most business processes are made up of 90% waste and only 10% value-added work, and I tend to agree with him.
Once I internalized the 8 forms of waste, I saw organizations and processes in such a different light and I began building an important muscle of strategic leaders, the muscle of understanding how to identify waste and quickly eliminate it. Now, I look at everything anyone does as either value-creating or non-value add. Every time a strategic leader eliminates waste they create value. So, get familiar with these 8 forms of waste, and start looking at your own organization and processes through the lens of waste.
What are the 8 forms of waste?
Waste is anything that does not add value or help positively transform input into the desired output. Think about what we defined as the purpose of an organization, ”to efficiently and effectively develop and deliver the customer value proposition and go-to-market.” Your company’s projects and processes not focused on this purpose are waste, and those projects and processes that are focused on this purpose most likely have a few of the 8 forms of waste in them.
Here are the 8 forms of waste:
1. Inventory as work-in-progress or finished goods are forms of waste until it gets processed or purchased by an end customer.
2. Transportation in the form of a product or item transported and the costs, delays, damage, and loss associated with the transportation.
3. Waiting is when a product or item in a process is waiting to be transported or processed. Waiting drives idle time and the associated costs.
4. Defects can be a large form of waste since defects often need to be scrapped or reworked.
5. Over-production is when you produce more products or items than required at that time by customers or the next stage of the process.
6. Over-processing occurs when you apply more work or resources applied to a part of a process than necessary. Over-processing also refers to when the end-product has more features than required by the customer and uses more expensive or higher quality components than necessary.
7. Motion is the unnecessary motion of people in a process and the unnecessary wear and tear on equipment that occurs in a process.
8. Intellect is the underutilized mental capacity of individuals.[vc_row padding_top=”0px” padding_bottom=”0px” border=”none” class=”MAN PAN”][vc_column fade_animation_offset=”45px”]
Why are the 8 forms of waste important?
Most managers and leaders have to figure out how to get more done with less. The 8 forms of waste allow strategic leaders a way to identify potential waste in any process, which is the first step to making processes more efficient and effective. Waste is everywhere within the processes of an organization, whether it be in HR, marketing, finance, sales, product development or operations. Waste consumes a company’s precious resources in the form of time, people, costs, capital and opportunity cost.
How do you identify & measure the 8 forms of waste?
The simple visual observation of a workplace, warehouse or manufacturing floor can help you identify waste. Where do you see inventory stacking up, unnecessary transportation in a process, items waiting to be processed, defects and quality issues, too much of something being produced, or people over-processing or spending too much time and energy doing something? These are all forms of waste.
Value stream mapping
Value stream mapping is different than process mapping. Value stream mapping has its own symbols and language for mapping how an organization creates value for customers. The focus is usually on one product or process. Creating a value stream map helps the team identify how work is currently performed, identify the high-level waste within the process, create a future state or a better way of creating value for the customer. Value stream mapping can help a team drive more value out of processes.
Value stream mapping forces you to take a stopwatch and an analytical mind to a process. One key to value stream mapping is to quantitatively measure waste, including wait times, processing times, utilization, defects, capacity, transportation time, demand and inventory. Once you measure the different forms of waste, it is much easier to prioritize your opportunities and start reconfiguring a process to drive more value and eliminate waste.
One of the most powerful ways to understand the dynamics of a process is to use software to simulate the process. Using software such as ProModel or SimEvents, you can abstract your processes and simulate production under different scenarios.
How do you eliminate waste?
DOWNLOAD THE 8 FORMS OF WASTE IDENTIFICATION WORKSHEET
To get you going on identifying waste, download the 8 Forms of Waste Identification Worksheet[sociallocker] [/sociallocker]
Exercise 1 – Assess an Important Process
Take an important process and use the Process Maturity Worksheet to document the inputs, general process and outputs. Then document the various stakeholders in terms of who generates or are the suppliers of inputs, who executes and is responsible for the general process, and who are the customers and beneficiaries of the outputs. Then observe the process and / or gather KPIs, and write down your various observations when it comes to the 8 forms of waste.