Toyota famously changed automobile manufacturing forever by focusing on continuous improvement, particularly on the never-ending process of waste elimination. Over the years, eight specific types of waste were identified. They are now referred to as the 8 wastes of Lean.
While Lean was originally developed in the automotive manufacturing sector, every business experiences waste in one form or another. In fact, if you keep your eyes open, you’ll notice waste is all around you.
Here are a few examples that our team has observed.
It is easy to imagine how a part rolling off an assembly line with a defect is a form of waste (and causes other types of waste). But, that’s not the only kind of error that eats into profitability and has the potential to upset customers. For example, I recently ordered a pair of pants. They arrived in timely fashion and were the right color they were even the right waist wise, but for some reason, the seller shipped the wrong length. This packing error turned what should have been one shipping charge paid for by the customer into three additional ones paid for by the company. That’s no way to keep in the black. Here are a few other common defects:
- Diagnostic errors that result in unnecessary tests or treatment
- Software coded with errors
- Food delivered in restaurants that doesn’t meet the customer’s special requests
The waste of waiting happens when people or processes are waiting for inputs, or when the next person or step in the process isn’t ready to accommodate the work in progress. If you’ve been on an airplane, you’ve probably experienced the waste of waiting first hand. The plane lands safely as scheduled, but there’s no gate available to let passengers deplane, so you, the crew and the plane sit. Other examples include:
- Construction workers waiting for materials to be delivered
- Office workers waiting for POs to be approved
- Restaurant customers waiting for bills (my colleague Maggie suggested this one - as the mother of a toddler who is a ticking time bomb in restaurants, this waste can result in quite the disturbance for other customers. Not to mention her sanity, she says.)
Movement of items more frequently or further than required results in wasted effort and energy and additional cost. It is often the result of poorly designed workspaces, distribution networks, or routes.
- Sending unsold inventory from the store to the warehouse or another store
- Shipping more supplies to an event than are needed
- Purchasing items from a distant supplier when a closer one is available
The waste of motion is akin to transportation, but it involves unnecessary activities and movements of people. It can be quite obvious, such as when office workers have to go to a distant cabinet to get supplies, or it can be subtle. For example, I wanted to find out what time a neighborhood restaurant opened yesterday. I expect that operating hours are something that many website visitors would like to know, yet they weren’t on the home page, nor were they on the About page. It took me five clicks to find the hours listed. Definitely a waste of motion. Here are a few more:
- Hospital workers searching for needed supplies or equipment
- The same data being entered into multiple software systems
- Disorganized paper filing systems
Overproduction is among the most costly of the eight types of waste. It is building more of a product than the customer ordered or wanted or building it earlier than needed. Overproduction is bad by itself, but it also contributes to the wastes of inventory and transportation. When you see items on clearance at the department store, you are witnessing the effects of overproduction. Other examples are:
- Empty office or retail space
- Uneaten meals in hospitals
- Holiday themed items that don’t sell before the holiday
The waste of inventory involves excess material, work in process or finished goods. Excess inventory has to be stored and managed. It also has the tendency to deteriorate over time, perhaps eventually needing to be discarded. I had a case of excess inventory myself just the other day. I found in my desk a box of 1000 business cards from a couple of years ago. I’d probably used about 100 of them. They included an old logo, so in the trash, they went. Other examples of excess inventory include:
- Pre-printed marketing materials or forms
- Cabinets of rarely needed office supplies
- Supplies of medications or consumables that don’t turn over frequently
Over processing is the crime of adding more complexity to a process or product than is required to get the desired value. There’s a great quote in the movie "Office Space" that speaks to a form of over processing. When talking about his apparent lack of motivation with a business consultant, Peter Gibbons says, “And here's something else, Bob: I have eight different bosses right now… Eight, Bob. So that means that when I make a mistake, I have eight different people coming by to tell me about it.” Here’s are some other forms of over processing:
- Product features that don’t get used
- Diagnostic tests that get repeated due to poor communication across the health system
- Multiple levels of purchasing approval
Although it hasn’t always been counted among the wastes of Lean, today’s leaders recognize that the waste of human potential is a serious problem in many organizations. It happens when individuals are prevented from contributing everything they can to the success of the company. This waste leads to disengagement and turnover, and it represents a serious opportunity cost. You see it when:
- Employees are not offered professional enrichment or training opportunities
- Paper suggestion boxes go unopened
- There is no clear career path
Given the amount of waste that occurs in almost every company, it’s not surprising that the reduction of waste is a prime target for improvement efforts. It’s a great idea to talk about the types of waste with your team and let them come up with their own examples. When they can do that, they’ll be ready to help your organization identify wasteful practices and correct them.