Ever since the Toyota Production System burst on the global industrial scene, people have written about the “Seven Deadly Wastes” in organizations. However, many have missed one of the biggest opportunities for quick improvement by overlooking one of the deadliest wastes, right under their noses: the inability to utilize the knowledge and skills of their employees.
With recruitment efforts and training budgets continually increasing in order to “get the right people on the bus,” once they are aboard, we often overlook the value of their knowledge, skills and attitudes to build on their strengths. As Jim Collins states in his book, Good to Great, you need to evaluate and develop your people’s assets. The goal should be to put the right people in the right seats to “drive your bus” to success.
This article will review the original “Seven Deadly Wastes,” and discuss the importance of getting everyone in the organization involved to improve all aspects of the operation, including reducing those Seven Deadly Wastes. The Eighth Waste — lack of employee involvement — is the linkage between Lean and Total Productive Maintenance (TPM). We will talk about how to improve the U.S. manufacturing world by taking advantage of our most valuable resource – the employees.
The most important step in helping preserve our country’s manufacturing industry is to instill ownership in our people. There needs to be buy-in to take advantage of people’s abilities and realize the benefits to reduce waste. It will take a lot of hard work to save prosperous jobs for our kids so they don’t have to grow up to learn how to say, “Would you like to super-size that?” Our society is quickly becoming a service industry due to the mass exodus of manufacturing jobs.
First, let’s briefly review the standard Seven Wastes.
- Overproduction – If the organization does not use a pull system to produce based on your customers’ needs, then you will most likely produce more finished goods than you can readily sell. You may also undersell or ship late, not meeting your customers’ demands. You should strive to meet 100% of your customers’ delivery compliance schedules. Overproduction is a waste, since it ties up valuable assets and causes your Materials and Logistics Departments to order more raw materials and produce more work-in-progress (WIP) goods that compounds the carrying costs. Do you ever have to store raw, WIP or finished goods in trailers because you have run out of warehouse space? This is a sure sign that you are producing the wrong mix of product compared to your sales forecast or your customers’ pull requirements.
- Delay (Waiting) – This is also a sign of not having the right mix of raw or WIP materials on hand when you need them. This can be process equipment or MRO components. How often are your craftspeople waiting for the right spare part to fix equipment? Do they ever have to cannibalize other pieces of equipment to get a critical machine back up and running to meet a customer’s need? When was the last time you worked on your vehicle or lawnmower and you reached for a wrench but found it wasn’t there? “Someone” didn’t put the tool back where you wanted it. Now you have to stop working on your task and search for the right tool to complete the job. Applying 5S to workstations can help eliminate these external delays. Another form of waste is an unbalanced work process where one person has to wait for the upstream operator to finish their task. “Takt time,” or the ideal time between phases of production output, synchronized to demand, is used to balance the work between operations to meet the customers’ needs in an efficient manner. Watch a NASCAR pit crew change four tires, clean the windshield and fill the tank in 13 seconds — that’s a balanced operation.
- Transport – All suppliers’ requests for quotes (RFQs) should be evaluated on a landed-cost basis. Many buyers forget about the cost to transport parts — that’s the Logistics Department’s responsibility, right? That’s the easiest way to document the cost to transport raw materials to your dock. Now try to calculate the cost to transport your raw materials, WIP and finished goods throughout your facility. Having a one-piece flow layout will reduce that cost and increase your turns. Using a process flow diagram or a Value Stream Mapping process will help document how inefficient and costly some layouts can be.
- Processing Inefficiencies – Using poor scheduling practices or running incapable equipment or tooling will cause process losses. That is why Standardized Work Practices (SWPs) are so important. Using a cross-functional team to validate SWPs or Standard Operating Procedures (SOPs) is the most sustainable method for instilling ownership and buy-in within the ranks of the most valuable asset you have — the people performing the work.
- Inventory – Excess inventory can be very costly. If the financial organization values your carrying cost at 30% and you have excess inventory in raw, WIP and finished goods, then there should be formal plans that reduce your inventory to increase your turns. Number of inventory turns is a standard metric to evaluate the effective utilization of your assets, that is, your material costs. Excess inventory can be a result of long lead times from your suppliers (internal or external), or the respective reorder triggers. Just-In- Time delivery and Kanban actions can reduce this excess cost. An inefficient workflow can also induce costly inventory into the process.
- Unnecessary Motion – Non-value-added efforts are like attorneys — you don’t realize how much time and effort you are wasting until you analyze the internal and external delays. Using a “dance chart” to document all of your travel time will illustrate how much time and effort you are expending without adding any value to the process or product. This will help you recognize the wastes in ineffective layouts, tooling or practices. Remember the pit crew? They review their performances using a bird’s eye camera view to evaluate any wasted movements and the motion, time and movement of each team member to balance the total operation.
- Scrapped Batches – If you have a plan to become world class to achieve a Six Sigma level of First Time Quality, then you understand the value of 1 PPM in scrap. Enough said. Making product that is out of spec is very costly.
The Eighth Waste