The 7 Deadly Lean Wastes

If it isn’t the sworn enemy & the very reason why Lean methodology is created in the first place: The 7 Lean Wastes. This article describes each and every waste categorized (acronym-ed as TIMWOOD) that manifest in any process. Leaving them unattended is a bad idea, and by streamlining the processes, it will help businesses to reduce expenses and maximize profits.

15 November 2021

What is Waste?

Lean trains the practitioners to develop the intelligence to “sense” waste and are trained to recognize waste that frequently manifest physically and virtually in any process and to categorize them by three main elements.

Muda – Non-Value Added Work

Muri – Unreasonable Work

Mura – Unbalanced Variation

Waste comes in many forms. Lean names them as the “7 Deadly Wastes”. They are Transportation, Inventory, Motion, Waiting, Over-processing, Over-production and Defects.

01.

What is Transportation?

Any unnecessary movement of materials, products, documents or information can be described as “transportation” waste. In transactional services, this is reflected by activities that transfer (or handovers) from one individual to another, within departments or between departments, which adds time to the overall process. In the service environment, this manifests itself as tasks to be collected and delivered, physically or virtually (electronic data transfers, e.g. processes involving multiple share service center sites).

Each time an activity is transferred or moved, it is exposed to the risks of being delayed, lost or done incorrectly. This results in inefficiencies that becomes inherent in the process.

Eliminating transportation cap at one extreme result in the combination of tasks of the other extreme result in the relocating or redirecting of tasks to minimize the physical or virtual movement.

02.

What is Inventory?

It is the work-in-process, or incomplete work, that does not meet the demand rate or the expected completion time of the customer. Inventory can be considered as “hyper-tension”, an invisible problem to the financial services. It is the physical piles of unattended inboxes, lists of pending enquiries or emails or time a client spends in a queue.

Having unattended inboxes also relates to having incurred the expense of time and cost of resource for work not done. In other words capital spent that is not producing revenue. Transactional activities that are not actively processed is non value add and is a waste.

The goal is to have the sufficient inventory for immediate and short-term needs. Ignoring process inventory drives up cost- investing into additional resources or larger virtual storage capacities. These are some examples of effects when inventory is not seriously considered.

03.

What is Motion?

Unnecessary movement of people or resources. The physical movement of personnel from a station to another to continue a process is an example of motion. Another example is switching between computer terminals or databases, which is a form of motion that requires additional steps to be executed before a true value-adding step can be carried out. Motion in the transactional world is often a result of Transportation and Inventory.

04.

What is Waiting?

Waiting is the time elapsed between the end of a process step (or activity) and the beginning of another. Waiting may have a direct or indirect impact on the customer. The time spent waiting between processes (or activities) results in customers having to wait for the delivery of a product or service. Techniques such as handover analysis, functional deployment maps and value stream maps are potent in identifying the wastes such as Motion and Waiting, which are typical causes of delays.

05.

What is Over-Processing?

Adding more work to a product or service than necessary and trying to exceed the customers’ requirement. This translates to adding more perceived “value” to a product or service. “Value” that a customer is not willing to pay for.

An example of over-processing in financial institutions is the inclusion of promotional and general marketing information with monthly bank statements. This is quite common for a customer who receives credit card statements via mail. The mail is often filled with glossy booklets and pamphlets. Not all customers would pay attention to this information.

Most of them would only review the information that matters – the credit card statement and the rest of the information pack would be discarded as waste. Over-processing occurs in this context as the service provider does not clearly understand the customer’s need. The standardized marketing and promotional process incurs additional cost (printing and postage for example) often with poor rates of returns.

06.

What is Over-Production?

Over-Production is the use of capacity and capability beyond the means of the present service or product requirement, resulting in outputs that are not delivered to customers. In simple terms, it can be viewed as the production or acquisition of material or information before it is actually required.

Over-production, in a sense, is work carried out ahead of the customers’ need and can also result in wastes such as the services performs without a clear understanding of the customer’s requirement. Over-production hides the effectiveness of true productivity. It creates the “just-in-case” behavior which causes costs to be incurred unnecessarily.

07.

What is Defect?

Defect, is always seen when there us non-conformity . when products or services do not conform to a customer’s demand, then it becomes a defect. All effort in terms of time, resources, and materials are wasted costs that are incurred to realize the product or service. Non-conformity comes with a price.