Continual improvement produces extraordinary benefits by applying the important concepts of value and waste. Adding value is the primary importance for customers and everyone needs to understand what customers’ value and how it impacts daily actions.
WHAT IS WASTE?
Waste: any activity that consumes resources without creating value for the customer.
< It does not materially change a product/service output
< Is not something a well-informed customer is willing to pay for
< It is any activity not done the 1st time correctly
Value is helping the effectiveness of the business, reducing waste, improving efficiency of producing that value, and freeing up time for more activities. An understanding of waste helps see the gaps and potential for improvement. Waste not only squanders business resources but it also frustrates workers. It is workers who experience the aggravations caused by interruptions, searching, moving, rework, and other forms of waste.
WHY ELIMINATE WASTE?
Eliminating waste is a practical way to: meet the increasing needs of customers, increase financial performance, have more rewarding jobs for the team.
A HUGE OPPORTUNITY
When asked how much time is spent during the day in two types of waste (searching for “stuff” like material, information, people and resolving defects or “Things gone wrong”) thousands of people answer two to five hours per day, an average of 44 percent of their work day. This is only two forms of waste!
Using a work process improvement method such as Kaizen typically results in a 30 percent to 50 percent reduction in labor (one process, one team, one week).
WHAT DOES WASTE LOOK LIKE?
Definitions and understanding of waste, as it applies to work processes and organizations, have evolved from the early 1900s to today. Today’s nomenclature is largely based on work developed by Toyota (Taiichi Ohno and the Toyota Production System) and popularized in the Lean improvement methodology. Waste is categorized into three types of wasteful practices:
MURA; Japanese term for unevenness, irregularity, or inconsistency. Examples include work that has wait steps, interruptions, or workloads that vary greatly causing team members to hurry and then wait.
MURI; Japanese term for overburden, unreasonableness, or absurdity. It refers to excessive demands on workers (sufficient time not allowed to create quality work), or equipment overburdening.
MUDA; Japanese term for non-value adding activities, those that consume resources without creating value for the customer. It refers to any activity that, when first implemented, does not materially change a product/service output in a way that satisfies or delights customers. These non-value added activities exist in virtually all work processes including production, overhead, and information.
Try it. Pick a work process and see if you can find all nine wastes. Muda waste can be separated into two types: TYPE 1: waste required by customers or law/regulation and TYPE 2: waste not required by customers or law/regulation. It is easier to start improving Type 2 wastes.
ACHIEVE SIGNIFICANT BENEFITS
Identify and eliminate waste in all levels of the organization, from strategy to daily work to achieve significant benefits.
< Improve specific work processes by eliminating and reducing wastes;
< Design the delivery of new products and services in new, less waste ways;
< Analyze product/service “value streams” to identify opportunities than can significantly improve capacity, speed, quality, and cost;
< Redesign organization structures to reduce overhead;
< Solve daily problems so they stay solved.
An understanding of waste helps to see the opportunities better, apply problem-solving approaches with better confidence in solutions that are effective and “stick.”
WHERE CAN YOU START?
1. Teach everyone the concepts and forms of waste. Help them see examples in their role. This is for everyone and everywhere, e.g., shop floor, order entry, financial, purchasing, and human resources.
2. Set the tone: a) Communicate that identifying and eliminating waste is everyone’s responsibility; b) Ensure that identifying waste is positive; no “shooting the messenger” c) Role model the behavior; visit the work, listen, look, and help identify wastes and solutions; d) Eliminate waste in leadership work processes.
3. Educate everyone in improvement methods (e.g., cause and effect analysis, 5S, Kaizen, Mistake Proofing, Flow); so that teams can effectively solve problems faster.
4. Learn from your problem-solving efforts, share, and replicate.
5. Measure waste elimination, celebrate successes, and never stop – there is always more waste.
Chris Bujak and Pam Vecellio of Continual Impact, based in Kempton, work with companies to build a culture of growth, innovation and high performance. They can be reached at email@example.com.