8 Wastes of Lean Manufacturing in a Services Context
04/06/2009 12:00:00 AM EDT
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Defining “Waste” As it Applies to Service Organizations
Anything that does not add value to the customer is a waste. Waste only adds to time and cost.
And the definition of “waste” in a service organization is quite similar to its Lean manufacturing definition.
When you look at a process, this customer could be an external customer/end user (consumer) for a process that has an impact on customers. For an internal process of an organization, this refers to an internal customer. Examples of the process of the former types include: sales, marketing, production, etc. The examples of the process in the later bucket include training, recruitment, administration, etc.
The 8 Wastes of Lean Manufacturing
Kudos to Taichi Ohno, the father of Toyota Production System. His 8 wastes of Lean manufacturing have a universal application. Despite what some practitioners may say or write, the 8 wastes of Lean are applicable not just in a Lean manufacturing system but also in services. Take any context and you'll see for yourself the applicability of the wastes as expressed by Ohno.
Table 1 summarizes the 8 wastes of Lean with examples from services. I have kept a column empty for you to fill with the ones that are visible in your own company.
Table 1 — 8 Wastes of Lean Manufacturing with Examples From Service Organizations
|Type of waste||What is it?||Examples||Examples from your own company|
|Waste of Over-production||
soon or too much than required
• Information sent automatically even when not required
• Printing documents before they are required
• Processing items before they are required by the next person in the process
|Waste of Defects||
• Rejections in sourcing applications
• Incorrect data entry
• Incorrect name printed on a credit card
• Surgical errors
|Waste of Inventory||Holding inventory (material and information) more than required||
• Files and documents awaiting to be processed
• Excess promotional material sent to the market
• Overstocked medicines in a hospital
• More servers than required
|Waste of Over-Processing||Processing more than required wherein a simple approach would have done||
• Too much paperwork for a mortgage loan
• Same data required in number of places in an application form
• Follow-ups and costs associated with coordination
• Too many approvals
• Multiple MIS reports
|Waste of Transportation||Movement of items more than required resulting in wasted efforts and energy and adding to cost||
• Movement of files and documents from one location to another
• Excessive e-mail attachments
• Multiple hand-offs
|Waste of Waiting||Employees and customers waiting||
• Customers waiting to be served by a contact center
• Queue in a grocery store
• Patients waiting for a doctor at a clinic
• System downtime
|Waste of Motion||Movement of people that does not add value||
• Looking for data and information
• Looking for surgical instruments
• Movement of people to and fro from filing, fax and Xerox machines
|Waste of Un-utilized People||Employees not leveraged to their own potential||
• Limited authority and responsibility
• Managers common
• Person put on a wrong job
In Conclusion of the 8 Wastes of Lean Manufacturing
The above definition of the 8 wastes of Lean should be looked at as something that is directional and should always be kept in mind while taking up a Lean optimization project. These are also called Non-Value Added activities, and I have seen processes in service business wherein up to 95 percent of the time is spent on these Non-Value Added activities. I shall talk about the concept of Value Added/Non-Value Added/Business-Value Added activities in my next column. Understanding this concept is a must for dissecting a process for Lean transformation.
Appreciating waste in a service business can be quite challenging as many of the activities do not happen before one’s eyes. What is needed is the usage of value stream mapping, which helps bring out the tacit wastes in a process. This has to be supported with sharp judgment of the change agents that are catalyzing the process improvements.
* = required.
Any discussion of waste in a service environment should include commentary about the difficulty in matching service production capacity of front lines staff (service supply) with demand from customers. Keeping a service staffed and operational when demand is slow and facing out-of-capacity situations during peaks is the largest source of company and consumer waste in services businesses. Unlike a production facility, the demand for services can be HIGHLY variable, and dependent on factors not easy to plan for. I agree that these basic tenets apply, but their application is far more difficult in a setting with widely variable & heterogeneous inputs and outputs.
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