Waste

This technique places a focus on the "value" of a product or service, as defined by the customer, not your organisation. Just about every process will have a value-add (VA) component and a non-value-add (NVA) component, and the percentage of the former is usually small compared to the latter. By reducing waste, in all its forms, the "value" component of a process can be increased. The benefits are increased productivity, reduced lead times, reduced costs and increased customer satisfaction.

Waste reduction can be applied to a single process in a system or the complete system, with the latter usually bringing about the most benefit, as the linkages between processes are often the source of the most waste, in the form of delays. As an example, in manufacturing this can be seen as inventory between workstations and in services or office functions, as the "in-box", awaiting action.

Types of Waste

In a production "line", either in a factory, a service organisation or in an office function, there is a demand from the customer which triggers the line to produce what the customer has asked for, in the shortest possible time, at the highest quality and at the lowest cost. Waste is anything that prevents this from happening.

Key aims are:

  • Pull the product or service though the line, to meet the customer demand rate, and create continuous flow from one workstation to the next.

  • Minimise inventory (physical or virtual) between workstations.

  • Level out the workflow to remove peaks and troughs.

  • Don't overburden people or equipment.

And key blockages, often known by the acronym of TIMWOODS (although there are others), are:

  • Transportation

  • Inventory

  • Movement

  • Waiting

  • Overproduction

  • Overprocessing

  • Defects

  • Skills Underutilisation (this has been added since the original list. See below)

Footnote: You will come across a lot of Japanese words in the world of waste reduction, as many of the techniques used have been pioneered by Toyota. They have created a very successful production system which encompasses a complete philosophy, containing fourteen principles, some of which are relatively easy to adopt and some which require significant organisational change. It is an inspiring read. The waste definitions listed above are taken from principle number two, rearranged to make an easy to remember acronym.

Mapping Value

Rather than using a traditional process map, a more useful tool to use for reducing waste is a Value Stream Map (VSM), which focusses on showing information and material flow at a macro level, across the whole end to end process. It can be used both for a simple office process of a few steps and a complex service or manufacturing process of many steps. Only essential processes are included, with no decision points being shown. Times are always included, with other measures and quantities being added where they are important to understanding the flow and potential areas of waste. Typical measures are :

  • Takt Time, being the demand rate from the customer.

  • Cycle Time, being the time for an item to be completed by a specific process.

  • Lead Time, being the time for that item to pass completely through a process and to be available to the following process. (may sometimes be shown separately from the process itself)

  • %Quality (or %Correct & Accurate), being a measure of defects produced during a process.

Cycle Times and Lead Times can be summed to arrive at totals for a end to end process.

As a rule, Value Add Time < Cycle Time < Lead Time, which is another way of saying that most processes take longer than they should and add less value than they should.

Creating a VSM is a very practical exercise, ideally undertaken by walking the process from end to end and recording what you see and the time taken for various activities. Two examples, one simple and one more complex, are:

A request for obtaining software in an office environment.

 

The production of machined panels in a factory environment.

Factory VSM.gif

Physical Layout

It can also be useful to draw a scaled, physical plan view of the area in which the processes are run, together with lines depicting the workflow of a person or material between processes. Sometimes, volumes of items being work flowed are included to indicate high traffic areas. This is called a String or Spaghetti diagram, because it can look like a tangle of spaghetti, but it can help to reduce unnecessary movement by re-arranging a physical layout.

 

Making Improvements

Improvements centre around reducing the many types of waste mentioned above. At individual processes some of those mentioned under TIMWOODS may be applied to good effect, but larger gains may require a rethink of the entire line in order to implement continuous flow. Some inventory may always be required. For example, in an office environment, where it may be more efficient to process items in batches due to software application constraints, or in manufacturing, where a particular machine can only produce at a far higher rate than the demand requires.

It’s also important to use the appropriate metrics. For example, having a measure of utilisation at a particular workstation is fine but using it as a goal, only to produce unnecessary output (and hence waste) will defeat the objective of continuous flow.

All changes should be made within a Plan > Do > Check > Act cycle.