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Lean focuses on identifying, reducing, and eventually eliminating wasteful and non-value added activities within an organization. By applying lean principles, an organization is able to increase its through-put, reduce waste and costs, and improve its profitability while at the same time increasing its customer satisfaction and improving its own employees’ satisfaction. Waste is anything that is not absolutely necessary to add value to the product or service being offered.
Lean strives to create systems and processes utilizing the least amount of resources including people, equipment, material and inventories, budget, and facilities. The success of lean is highly dependent on its principles being understood by all employees and those employees being involved in its applications.
One of the main focuses of lean is to eliminate waste in all phases of operation. There are seven categories of waste:
Let’s look at each of these seven categories of waste.
The waste of overproduction is producing more than is needed or producing faster than is needed. Some examples of waste of overproduction would include:
The waste of waiting exists when idle time is created when people wait for machines, people wait for people, or machines wait for people. Some examples of waste of waiting would include:
The waste of transportation happens anytime goods or paper work are moved, the are handled more than once, there are delays in moving materials, or there is any unnecessary moving or handling of goods or paper. Examples of waste of transportation are:
The waste of over-processing develops from efforts that add no value to the product or service from the customer’s viewpoint. Examples
The waste of inventory occurs any time you have any supply on inventory on hand in excess of customer requirements necessary to produce goods or services just-in-time. It also occurs when you have more materials, parts, products, supplies on hand than are needed right now. Some examples of waste of inventory:
The waste of motion exists any time you have any movement of people that does not add value. Some examples of waste of motion are:
The waste of producing defects occurs in work that contains errors, needs rework, has mistakes, or lacks something necessary. Examples of waste of producing rejects include:
The other aspect of lean is when you separate the value added activities from the non-value added activities. Value added activities are those activities that physically change the work to meet customer requirements or a specific request for which the customer is willing to pay. All other steps are considered non-value added.
Another way to look at non-valued added activities is to ask “Will the customer pay for it?” If the item was on an invoice, would the customer pay for it? If the answer is yes, it is valued added. If the answer is no, it is considered non-value added.
Some examples of non-value added activities would include:
While these activities may be very necessary to provide a product or service, many organizations will automate these and other non-value added activities.