The idea of thinking of a process in terms of value-added versus non-value-added
or wasteful activities is easy to understand and definitely makes it easier to identify
and eliminate waste.
 Waste is a symptom rather than a root cause of the problem: Waste is a
visible consequence of underlying issues or inefficiencies in a process. It's not
the root cause itself but a result of deeper problems.
 Waste points to problems within the system: When you observe waste, it
indicates that something is amiss within the system. It's like a red flag that
prompts you to investigate and address the underlying issues.
 We need to find and address the root causes of waste: To effectively reduce
waste and improve processes, it's essential to identify and eliminate the root
causes that give rise to waste. This involves diagnosing and addressing the
fundamental problems responsible for generating waste in the first place.
1. Inventory
Inventory is a buffer between suppliers, manufacturers, and customers and is
needed to compensate for lead times (e.g., in transportation, manufacturing, etc.)
and variability in the system, such as forecast errors, late deliveries, setup times,
scrap or rework, quality problems, and downtime.
Finished goods inventory is generally the most expensive inventory as it has labour
and other overhead attached to it along with the cost of material con- sumed during
production. In order to reduce this inventory, process improvements and a higher
accuracy in forecasting customer requirements are required.
All of these types of inventory cost money to maintain. This is called holding or
carrying costs. These costs can range from 15 to 30 percent of the value of a product
and include cost of capital (i.e., borrowing costs or opportunity cost lost if the
money was invested elsewhere), taxes, storage, insurance, handling, labor,
obsolescence, damage, and pilferage.
Inventory waste refers to the waste produced by unprocessed inventory. This
includes the waste of storage, the waste of capital tied up in unprocessed inventory,
the waste of transporting the inventory, the containers used to hold inventory, the
lighting of the storage space, etc.
The environmental impacts of inventory waste are packaging, deterioration or
damage to work in process, additional materials to replace damaged or obsolete
inventory, and the energy to light, as well as either heat or cool, inventory space.
Inventory will have a negative impact on working capital and on cash flow, so that
sophisticated production planning must focus on the optimum levels of inventory
throughout the value chain and operations (Helmold and Terry 2016a, b).
In reality, businesses need some inventory and typically have to balance the
tradeoff between the cost of carrying inventory and customer service when
determining how much.
Excess inventory is really a “symptom” of the problem. Moreover, having excess
inventory can hide the original wastes of producing said inventory. It is often said
that the idea is to lower the water level until the “rocks” show above the water.
Instead, identify the sources of variability and then, using analytical tools (described
in more detail in Chap. 6), such as the Pareto principle (also known as the “80/20”
rule), root cause analysis, and the “Five whys” (keep asking “why” until you get to
the root cause), reduce or eliminate the variability and then reduce the inventory
levels.
1. Purchasing raw materials only when needed and in the quantity needed:
 This principle is a fundamental concept of lean inventory management.
It aims to minimize waste by purchasing raw materials or components
only when there is a specific demand or a customer order that requires
them.
 By doing so, a company avoids holding excessive inventory, which can
lead to various forms of waste, such as carrying costs, storage costs,
and the risk of obsolescence.
 It also reduces the need for warehousing space and the associated
costs, while ensuring that the company has the right materials at the
right time to meet customer demand efficiently.
2. Reducing buffers between production steps:
 In manufacturing processes, buffers or excessive inventory between
production steps can lead to inefficiencies and waste. These buffers
are often used to compensate for variations in production speed or to
ensure that the next step in the process is not delayed.
 By reducing these buffers and improving the flow of materials and
work-in-progress between production steps, a company can minimize
waste.
 Waste reduction occurs because smaller buffers result in less excess
inventory, reduced handling and storage costs, and shorter lead times.
This enables the company to respond more quickly to changing
customer demands and market conditions.
3. Creating a queue system to prevent overproduction:
 Overproduction is a common source of waste in manufacturing. It
occurs when a company produces more goods than can be
immediately sold or used. These excess items often end up as finished
goods inventory and can lead to waste in the form of carrying costs and
potential obsolescence.
 Implementing a queue system, such as a pull production system (e.g.,
Kanban), helps prevent overproduction by ensuring that production
only occurs in response to actual customer demand.
 In a queue system, workstations or production processes pull materials
or components only when they are needed, creating a "just-in-time"
production flow. This minimizes the accumulation of excess inventory
and helps align production with actual demand.
Examples of wastes of transport are the transport of product from one functional
area such as pressing to another area such as welding or the use of material
handling devices to move batches of material from one machine to another within
a work cell. It wastes time because operators are dedicating the available time of
the work day to moving items from one place to another. It wastes energy and
resources in that employee for time could be better utilized and because some tools
used for transportation (forklifts, trucks, pallet jacks) consume energy like
electricity or propane. Also, by dedicating machines and operators ́ time to waste
activities, they are no longer free and available to take on value-added activities.
Figure 4.6 shows transportation waste. Reasons can be insuf- ficient layouts and
long distances between individual operations. The consequences of this waste are
the increased time requirements and the decreased productivity. Decreased
productivity will result in higher operating cost and can harm the profit- ability of
the enterprise (Liker 2004).
2-Transportation
Ideally, when material is received, it should only be touched once to put it away and
another time to pull it for consumption. However, the reality is that it rarely
happens this way. Material may be moved from one place to another on the floor,
put on a storage rack, pulled to remove some material, then returned to a different
rack, etc. All of this excess movement is wasteful. Companies are not only paying a
forklift driver to move the material, but each time it is moved, damages may occur,
and each time material is moved, inventory accuracy may be affected. When
material is returned to a different spot, there is the risk of losing it and accidentally
ordering more (yes, that does happen).
Excess transportation is a significant waste because the time, manpower, energy,
efforts, and resources required to move items are something the customer does
not care and does not want to pay (Ohno 1990).
Examples of wastes of transport are the transport of product from one functional
area such as pressing to another area such as welding or the use of material
handling devices to move batches of material from one machine to another within
a work cell. It wastes time because operators are dedicating the available time of
the work day to moving items from one place to another. It wastes energy and
resources in that employee for time could be better utilized and because some tools
used for transportation (forklifts, trucks, pallet jacks) consume energy like
electricity or propane. Also, by dedicating machines and operators ́ time to waste
activities, they are no longer free and available to take on value-added activities.
Figure 4.6 shows transportation waste. Reasons can be insuf- ficient layouts and
long distances between individual operations. The consequences of this waste are
the increased time requirements and the decreased productivity. Decreased
productivity will result in higher operating cost and can harm the profit- ability of
the enterprise (Liker 2004).
1. Creating U-shape production line
 A U-shaped production line is designed so that different processes or
workstations are arranged in a U-shaped pattern, allowing for a more
efficient flow of materials and products between them.
 By eliminating the need for long, linear layouts, products and materials
have shorter distances to travel between processes, reducing
transportation waste.
 This layout minimizes the time and resources wasted on moving items
across a large factory floor, contributing to lean production and reducing
transportation-related costs.
2. Creating flow between processes:
 "Creating flow" in a production system means designing processes to
be interconnected, with a smooth and uninterrupted flow of materials
or work-in-process items from one process to the next.
 By reducing interruptions or bottlenecks in the production process,
transportation waste is minimized as there is less need to transport
items to temporary storage or deal with congestion.
 Efficient flow ensures that materials or products move directly from
one step to the next, reducing unnecessary handling and
transportation, which can save time and resources.
3. Not over-producing work-in-process (WIP) items:
 Overproduction of WIP items often necessitates additional
transportation to move these excess items to storage or between
processes.
 Avoiding overproduction reduces the need for unnecessary
transportation, which can lead to less congestion and smoother
material flow.
 A focus on producing only what is needed at a given time reduces the
chances of WIP items piling up and being transported unnecessarily
within the production system, thereby reducing transportation waste.
3.Motion
Motion waste will lead to higher cost as the productivity decreases.
Another problem of motion is the necessity for more time and capacity in
operations than actually required.
having just enough material or information nearby, which can be replenished when
needed from further away (a kanban-an excellent visual tool for this type of
replenishment).
When thinking about motion waste, the term ergonomics should come to mind.
Ergonomics is the science of how humans interact with equipment and the
workplace. So in terms of motion, you don’t just want to consider efficiency, but
safety as well (i.e., avoiding back injuries, carpal tunnel syndrome, etc.).
1. Making sure the workspace is well organized:
 A well-organized workspace reduces the need for employees to search
for tools, materials, or information.
 When everything is in its place and easily accessible, employees can
perform their tasks more efficiently, with less time wasted on
searching or reaching for items.
 This minimizes motion waste by streamlining the work process and
reducing unnecessary movements within the workspace.
2. Placing equipment near the production location:
 Locating equipment, tools, or machinery close to the point of use
reduces the distance that employees need to travel to access them.
 Proximity between equipment and the production area minimizes the
time and effort spent in moving back and forth, reducing motion
waste.
 It also supports a smoother workflow, as employees can quickly
transition between tasks without significant delays.
3. Putting materials at an ergonomic position to reduce stretching and straining:
 Placing materials at an ergonomic height and within easy reach of
employees minimizes the need for excessive stretching, bending, or
straining during work.
 By reducing physically demanding movements, this approach
decreases the risk of injuries and fatigue while optimizing efficiency.
 It helps to eliminate unnecessary, non-value-added motion,
contributing to a more productive and ergonomic work environment.
4. Waiting
Everyone, whether on the shop floor, in a warehouse, or in an office can easily
identify with this type of waste. It is both frustrating and counterproductive.
-a great deal of a product’s or service’s lead time is spent on waiting. In many cases,
the waiting is caused by the next operation.
In an office environment, time can be spent waiting on equipment to start up,
printer or computer breakdown, signatures, employees on different work
schedules, and even meeting attendees not showing up on time (which never
happens, of course).
In many warehouses or distribution centers, products can sit “waiting” between
different steps in the process (e.g., receiving, putting away, replenishing, picking,
packing, and shipping).
1. Designing processes to ensure continuous flow or single-piece flow:
 Continuous flow or single-piece flow refers to a production approach
where items move seamlessly from one step to the next without
waiting or batching.
 By designing processes to achieve this kind of flow, waiting times
between production steps are minimized or eliminated.
 This reduces waiting waste as products or work-in-process items move
through the production process without delays, ensuring a more
streamlined and efficient workflow.
2. Leveling out the workload by using standardized work instructions:
 Standardized work instructions help establish consistent and balanced
workloads for employees.
 By having clear, standardized processes, employees are less likely to
experience delays or waiting times due to variations in work
requirements.
 This approach reduces waiting waste by ensuring that work is
distributed evenly across the workforce and that everyone has a
consistent and manageable workload.
3. Developing flexible multi-skilled workers who can quickly adjust to work
demands:
 Flexible, multi-skilled workers are capable of handling various tasks
within a production process, making it easier to reassign them to areas
where work demand is high.
 When workers can adapt quickly to changing work demands, waiting
waste is reduced, as there's less need to wait for specialized workers
to become available for specific tasks.
 This flexibility helps maintain a continuous workflow and minimizes
downtime caused by skill imbalances.
In summary, these practices aim to reduce waiting waste by ensuring that
production processes are designed for smooth, continuous flow, workloads are
balanced and standardized, and workers are versatile and adaptable. By minimizing
waiting times and interruptions in the production process, these practices lead to
increased productivity and efficiency.
5. Overproduction
However, rather than producing products just when they are needed under the
‘Just In Time’ philosophy, the ‘Just In Case’ way of working leads a host of problems
including preventing smooth flow of work, higher storage costs, hiding defects
inside the WIP, requiring more capital expenditure to fund the production process,
and excessive lead-time. Additionally, over-producing a product also leads to an
increase in likelihood that the product or quantities of products produced are
beyond the customer’s requirements.
1. Using 'Takt Time' to ensure even manufacturing rates between stations:
 Takt Time is the rate at which products or components must be
produced to meet customer demand.
 By setting and adhering to Takt Time, the production process ensures
that the rate of manufacturing between stations is even and matches
the customer's demand rate.
 This prevents overproduction by aligning production with actual
demand, avoiding the accumulation of excess inventory, and reducing
waste associated with producing more than what is needed.
2. Reducing setup times to enable manufacturing of small batches or singlepiece flow:
 Longer setup times can discourage the production of small batches or
single-piece flow, leading to larger, unnecessary production runs.
 By reducing setup times through techniques such as SMED (SingleMinute Exchange of Die), it becomes more feasible to switch quickly
between different product variants or produce in smaller quantities.
 This flexibility helps prevent overproduction by allowing the
production system to adapt to changing customer demands and
produce only what is required, minimizing the waste of excess
inventory.
3. Using a pull or 'Kanban' system to control the amount of work-in-progress
(WIP):
 A pull or Kanban system operates based on the principle of producing
items only in response to a signal from downstream processes or
customer demand.
 This system helps control the amount of work-in-progress (WIP) by
ensuring that no new work is started until there is demand for it.
 By eliminating the practice of pushing items through production
regardless of actual demand, overproduction is mitigated, and WIP
levels are kept in check, reducing waste and associated costs.