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How to Use Lean for Business Efficiency

A Lean business is one that maintains an unrelenting focus on providing customer value and an unwavering disdain for waste. Just what is waste — known, in Lean parlance, as muda? Any cost or business process that does not create value. Rooting out muda in your organization is a key tenet of a Lean philosophy.

Value stream mapping

While you can review the list of the seven types of muda below to get your brainstorming juices flowing — and this list is a great place to start — for a deeper dive, construct a value stream map for each of your business processes.

On the left, at the start of your map, is your input, such as an e-mail, a customer order, or a piece of steel. Every step on the map represents the next step that input must go through in order to arrive at or become its final destination: the end product or service. A fleshed-out value stream map indicates time and distance at each step, too.

You can write out a value stream map as a list, but it’s more fun to draw it out like an actual map!

The seven types of waste

Since every muda is an inefficiency by definition, any internal process you identify in the table is one to add to the list of internal inefficiencies.

You may be thinking that some of these wastes are truly beyond your control. Regulatory demands, accounting requirements, or natural events may be causing these. For this reason, muda is divided into two classifications:

  • Type-1 muda includes actions that are non-value-added, but are for some other reason deemed necessary. These forms of waste usually cannot be eliminated immediately.

  • Type-2 muda are those activities that are non-value-added and are also not necessary. These are the first targets for elimination.

The Seven Forms of Waste
Form of Waste Also Known As Explanation
Transport Conveyance Any movement of product or materials that is not otherwise required to perform value-added processing is waste. The more you move, the more opportunity you have for damage or injury.
Waiting Waiting or delay Waiting in all forms is a waste. Any time a worker’s hands are idle is a waste of that resource, whether due to shortages, unbalanced workloads, need for instructions, or by design.
Overproduction Overproduction Producing more than your customer requires is waste. It causes other wastes like inventory costs, manpower and conveyance to deal with excess product, consumption of raw materials, installation of excess capacity, and so on.
Defect Correction, repair, rejects Any process, product, or service that fails to meet specifications is waste. Any processing that does not transform the product or is not done right the first time is also waste.
Inventory Inventory Inventory anywhere in the value stream is not adding value. You may need inventory to manage imbalance between demand and production, but it is still non-value-added. It ties up financial resources. It is at risk to damage, obsolescence, spoilage, and quality issues. It takes up floor space and other resources to manage and track it. In addition, large inventories can cover up other sins in the process like imbalances, equipment issues, or poor work practices.
Motion Motion or movement Any movement of a person’s body that does not add value to the process is waste. This includes walking, bending, lifting, twisting, and reaching. It also includes any adjustments or alignments made before the product can be transformed.
Extra processing Processing or overprocessing Any processing that does not add value to the product or is the result of inadequate technology, sensitive materials, or quality prevention is waste. Examples include in-process protective packaging, alignment processing such as basting in garment manufacturing or the removal of sprues in castings and molded parts.
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