Identification of Waste

Input (Resources)
Transformation

Output

Energy People Capital Water Materials Tools

Products Services

Purpose of Waste
Educate supplier of the evils of waste
What Where Why Steps to reduce and/or eliminate

Show improvement potential that exists Improve the processs value added content

Identification of Waste
Input
(Resources)

Transformation

Output

Energy People Capital Water Materials Tools

Products Services

Defining Waste
Webster: to consume carelessly squander fail to take advantage uncultivated area junk worthless residue loss energy grow weaker

Definition of Waste
Anything that doesnt add value to the process Anything that doesnt help create conformance to the customers specifications Anything your customer would be unwilling to pay you to do

Understanding Waste
Identification and elimination of waste is the central focus of a lean system It is dependent on the understanding and involvement of all employees. Successful implementation requires all employees to be trained to identify and eliminate waste from their work areas

Understanding Waste

Waste exists in all work and at all levels in the organization

Understanding Waste
Waste: Anything other than the minimum resources
Equipment and tooling Direct and indirect labor Material Floor space Energy

Absolutely necessary to add value to the product!

Identification of Waste
Types of Waste:
Inventory Overproduction Correction Materials and information movement Processing Waiting Motion

Waste of Inventory
Definition: Any supply in excess of customer requirements necessary to produce goods or services just-in-time

Symptoms Complex tracking systems Extra storage and handling Extra rework/hidden problems Paperwork/documents Stagnated information flow High disposal costs Obsolete material / landfill In-process packaging High utility costs

Root Causes Product complexity Incapable processes Unleveled scheduling Poor market forecast Unbalanced workload Unreliable supplier shipments Inadequate measurement Misunderstood communications Reward system

Inventory Hides Problems!! Inventory Hides Waste!!

Why We Want To Reduce Inventory

1.

Interest expense associated with working capital:

Requirements to produce goods:
People, materials, facility, know-how, customers An organization + working capital

Working Capital = Cash + Inventory + Accounts Receivables Accounts Payables - collect faster - defer payments - reduce inventory

Benefits of reducing inventory in working capital:

Save interest expense Free up cash for investment

2.

The greater the inventory, the greater the handling:

Forklifts, bins, containers, indirect labor to move/store the inventory Administrative effort and cost to control the inventory (losses, locating and counting)

Why We Want To Reduce Inventory

3.

Inventories deteriorates, causing more scrap and rework:

Metal rusts Lubricants dry out Materials accumulate dirt

4.

Inventory takes up space:

Adds cost to heal, light, and insurance Facilities should be used for Value-added activities (i.e. production rather that warehousing)

5.

Guiding principles of lean manufacturing:

Elimination of buffers makes problems surface and forces organization to address and resolve problems Leads to need for:
Pull systems Quick die setup Manufacturing organized by product rather than process Good balancing Multifunctional workers Preventive maintenance Etc.

Why We Want To Reduce Inventory

6. Reduce scrap / rework.
When defect is detected, the entire inventory has to be scrapped, reworked, and/or sorted.

WASTE of Overproduction
Definition: Producing more than needed Producing faster than needed Root Causes: Just-in-case logic Misuse of automation Long process set-up Unleveled scheduling Unbalanced workload Over engineered equipment/capability Redundant inspections Lack of reuse and recycling Symptoms Excessive raw materials Extra inventory Unnecessary work Excessive floor space utilized Unbalanced material flow Backups between departments Complex information management Disposal charges Extra waste handling and treatment High utility costs

WASTE of Correction
Definition: Any supply in excess of customer requirements necessary to produce goods or services just-in-time Root Causes: Weak process control Questionable quality Lack of error proofing Unbalanced inventory level Deficient planned maintenance Poor product design Customer needs not understood Improper handling Poorly managed waste streams Inadequate training Symptoms Rework, repairs and scrap Added inventory costs Customer returns Loss of customer confidence Loss of business Missed shipments / deliveries Hazardous waste generation

WASTE of Material and Information Movement

Definition: Any material or information movement. Symptoms Extra handling Extra handling equipment Extra inventory Large storage areas Over-staffing Reduced quality Extra paperwork Extra hand-offs Transport of disposal Excessive energy consumption Excessive emissions Root Causes: Mislocated materials Unleveled scheduling Unfavorable facility layout Redundant inspections Poor workplace organization and housekeeping Poorly managed waste streams Unbalanced processes Supply chain management

WASTE of Processing
Definition: Effort which adds no value to the product or service from the customers perspective. Root Causes: Product changes without process changes Just-in-case logic Lack of communication Redundant approvals Extra copies, excess information Undefined customer requirements stop-gap measures that become part of the process Lack of reuse / recycling Symptoms Unnecessary work Extra equipment Longer lead time Reduced productivity Extra material movement Sorting, testing, inspection Inappropriate use of resources Excess energy consumption Processing by-products

WASTE of Waiting
Definition: Idle time created when people wait for machines, people wait for people, machines wait for people, and machines waiting on machines Root Causes: Unbalanced workload Unplanned maintenance Long process set-up times Misuse of automation Quality problems Unleveled scheduling Ineffective layout Specialization Symptoms Under-utilization of resources Reduced productivity Increased in investment Idle equipment Large waiting / storage rooms Equipment running, not producing Unnecessary testing

WASTE of Motion
Definition: Any movement of people or machines Root Causes: Poor ergonomics / layout Machine / process design Inconsistent work methods Poor workplace organization and housekeeping Extra busy movements while waiting Symptoms Reduced productivity Large reach / walk distances Longer lead times Excess handling Reduced quality People / machines waiting High energy cost Inappropriate use of resources

Resource Conservation and Pollution Prevention

Opportunity Energy Symptom (s) High utility cost Root Cause (s) Outdated technologies Deficient planned maintenance Need for conservation practices Poor process design Incomplete job instructions Corrective Action Suggestions Useless energy intensive method than compressed air for cooling, parts moving and agitating liquids Repair Steam and compressed air leaks Install motion detection switches or lighting systems Re-circulate and reuse cooling water Throttle back water valves on leak detection and overflow rinse tanks Find ways to reduce water usage Install automatic valves to stop water flow when equipment is not being used Consider fuel consumption and tailpipe emission reductions when optimizing transportation logistics

Water

High water usage High treatment costs

transportation

High fuel cost Smog and pollution

Lack of consideration on energy and environmental impacts

Resource Conservation and Pollution Prevention

Opportunity Hazardous waste Symptom (s) Hazardous waste Toxic emissions High disposal costs High pollution control costs Excess material usage Excess storage and handling High disposal costs Root Cause (s) Product design Materials specifications Lack of consideration of environmental impacts Lack of reuse and recycling procedures Incomplete process instructions Insufficient workplace organization Inadequate education and training Corrective Action Suggestions Utilize non-solvent-based coatings and cleaners Purchase only non-toxic materials and products Use a metals reclamation and wash system to recover metals and reduce wastewater effluent Segregate waste packaging inprocess to avoid manual sorting for recycling Utilize all materials in containers and drums Utilize only two-sided copying Recover and use scrap materials in the production process Repair and reuse pallets

Non-hazardous waste

Resource Conservation and Pollution Prevention

Opportunity Product design Symptom (s) Toxic emissions Hazardous waste High engineered scrap rates High disposal costs High pollution control costs Employee exposures to hazardous materials Root Cause (s) Product design Materials specifications Specifications of virgin material use only Lack of consideration on environmental impacts Poor planning Lack of knowledge of the process Inadequate measurement systems Incomplete job instructions Corrective Action Suggestions Provide suppliers with performancebased rather than prescriptive specifications for products Specify the use of recycled-content in products Consider environmental and human health impacts of manufacturing, use and disposal during design stages Design products for disassembly, recycle and reuse Provide job instructions in the correct amounts of materials to use and proper waste recycling procedures Post information for employees to increase awareness of the cost and environmental impacts of waste Establish environmental policies and goals. Integrate these goals into the employee performance review and compensation system

Environmental Management