The 7 Wastes provide a central theme to the lean methodology. The goal of lean is to maximize value and minimize waste. Ultimately, value to the customer is the top priority, because without value, there won’t be a customer. Despite this, waste reduction gets significantly more attention than adding value. This is natural. In most organizations, few people in the organization have the ability to change a product or service to increase the value it offers the customer, but everyone can reduce waste.
The ideas behind the 7 Wastes were developed as an integral component of lean from its origin at Toyota. The result was theToyota Production System, and ultimately, the concepts and methodology of lean. Each of the 7 Wastes relates to a specific wasteful activity typically found in manufacturing and services.
Over the years, the 7 Wastes have been adapted and modified. Some practitioners have developed alternatives to the 7 Wastes in order to apply them to non-manufacturing organizations. For example, one of the original wastes is excess inventory. A software development company will not have inventory in the traditional sense. Instead, the waste of uncompleted projects replaces the inventory waste. Regardless of the industry, the 7 Wastes provide a guiding set of principles to help reduce waste. At the core of the 7 Wastes is the philosophy that excessive use of resources, unnecessarily idle resources, movement of resources and defective resources are all wastes to be eliminated.
Below are the original 7 Wastes:
- Overproduction: Producing more than is needed. Any resources expended unnecessarily are considered waste, and producing product when it is not needed is a common waste in manufacturing. This can occur due to poor production planning and control, or it may result from improper incentive systems that reward overproduction.
- Inventory: All idle resources are wasteful, and inventory is one of the most common. Raw materials, WIP and Finished Goods inventories require significant capital investments, but add no value to the product. Some may argue that having product on hand so it can ship immediately adds value to the customer. Short lead times add value, but holding inventory does not. The goal of lean is to achieve the value desired, such as short lead times, without any waste, such as high inventory levels.
- Wait Time: Whenever materials, people or machines are sitting idle. Waiting occurs when queues are built within processes, or when the time required for workers or machines to conduct a value added process is out of sync with each other. In these situations, one of the resources is waiting, and waste is occurring. Ideally, every resource would be put to productive use 100% of the time it is required. Any time a resource spends idle represents lost capacity and productivity, and increases lead time to the customer.
- Transportation: Material movement that does not move the product to the customer. The definitions of waste and value vary within the lean community. There are some who consider all transportation costs as waste. Others consider some transportation as value added since a product is more valuable to a customer once it is delivered to the customer. Regardless of the view on transportation, minimizing transport costs is a goal of lean.
- Processing: Excessive processing includes any activity that provides no additional value to a product or service. Often, excessive processing occurs when an individual processing operation can be combined with other processes or can be eliminated all together. For example, packaging processes do not add any value to a product.
- Motion: Any movement, of people, machines or materials that does not add value to a product. The elimination of motion was one the major drivers that led to the development of cellular manufacturing techniques. With these techniques, production is completed in a small work cell combining multiple operations with little to no movement between each operation, and without excess motion expended by the worker.
- Defects: Poor quality drives up costs both in wasted materials and labor. Lean manufacturing draws heavily on total quality techniques and seeks to ensure every activity delivers value. Defects disrupt this process, causing materials and labor to be lost. More recently, reducing waste and eliminating defects have taken a major step forward with the development of six sigma techniques. Six sigma tools compliment the lean framework, and many practitioners describe the combination as Lean Six Sigma.
Over the years, the 7 Wastes have been adapted by some practitioners of lean to include an 8th waste. This new waste is really not new, but has been an integral component of lean from the beginning. The 8th Waste is the untapped potential of a company’s workforce. It includes all the ideas, creativity, skills, experience and abilities the workers in a company possess, but that are not used by the company.
This omission in the original 7 Wastes of the Toyota Production System is understandable. This system focused on waste reduction from the bottom up. Toyota worked to drive initiative and creativity from its workforce. When you have a company that structures itself around an employee empowerment philosophy, emphasizing employee involvement would be easy to overlook as it is a core component of the culture.
As lean has been adopted by a wide range of companies, the importance of this 8th Waste has become extremely important. Many companies have policies, procedures and a culture that discourages employee creativity, initiative and empowerment. For lean to reach its potential, overcoming these obstacles is essential, and the 8th Waste became a significant point of emphasis for lean practitioners. The distinction between considering lost human potential as an 8th Waste, or considering it a more fundamental element of lean is not important. Maximizing the utilization of a workforce is essential for lean to help a company achieve its potential. Without complete employee involvement and participation, lean cannot be successfully driven top-down. It needs to have a bottom-up component. So, recognizing the importance of human potential as an 8th Waste may be a great way to capture this element of lean.
Lost employee potential is commonly accepted as the 8th Waste, but this does not mean it is universally accepted as such. Numerous practitioners of lean have tried to put their own stamp on the lean methodology and the 7 Wastes by adding other wastes. There is a wide range of additional wastes that are occasionally discussed in lean. Many of these ideas for adding new wastes provide a good emphasis on a particular issue in an organization. Often, though, they relate to ideas already embedded within lean and the original 7 Wastes. Taiichi Ohno, the originator of the 7 Wastes at Toyota, got it right 50 years ago, and the 7 Wastes provide an excellent framework for lean.