Monday, February 11, 2013
The Seven Deadly Wastes
In last week’s lecture, we talked about Lean Manufacturing and its focus on reducing non-value added tasks. Lean defines “waste” as any activity that does not add value to the final product or service. It could also be categorized as an activity that the customer is not willing to pay more for. On doing some research, I found an article which talks about Ohno’s classification of waste or “mudas” into seven areas of manufacturing:
Waste of Over-production— Lean incorporates concepts such as “Just-In-Time” manufacturing, which refers to producing products that are needed, when they are needed and in quantities that is needed. Production facilities usually believe that stopping production due to the lack of orders is expensive and inefficient. However, in a lean manufacturing environment, zero orders equals zero production. In addition to production costs, over-production poses the problem of obsolescence. Without customer orders, products remain in warehouses for days (increasing storage costs) and this reduces the value (and demand) of the product. 
Waste of Defects— Production defects could force manufacturers to rework or discard products. A high proportion of defective products is indicative of quality problems in the production process. This not only increases costs associated with inspections, replacements, and reworking, but it also strains relations with customers (and could even lead to the loss of a long-term customer). It is therefore important to build quality into the manufacturing process.
Waste of Inventory— Companies are often confused about the levels of inventory they should maintain to satisfy customers. Keeping a large volume of inventory increases storage costs, ties up cash flow and also requires more manpower to shift and sort the inventory.  Estimating appropriate inventory levels can help reduce these costs.
Waste of Over-Processing—This refers to separating areas of manufacturing that require necessary work and those that can be eliminated. If the work adds value to the final product, then it is considered as necessary. Those processes that make the product more appealing and could be eliminated, are considered a waste. 
Waste of Transportation— Although transportation of raw materials and product delivery are necessary activities, they do not directly add to the final value of the product. Since these costs cannot be entirely avoided, Ohno recommends that transportation costs should be minimized as much as possible. Products/materials should be stored close to the point of use. Picking up products from multiple suppliers on a route could also help reduce this type of waste. 
Waste of Waiting—This type of waste occurs when there is a shortage of a component, or a machine is down, or if there is a workers’ strike etc. Waits can be avoided by implementing preventative machine maintenance program, standardized work process and material planning methods.
Waste of Motion— Ohno recommends that areas that involve a lot of bending, lifting and walking, should be simplified to reduce waste of motion. This not only fastens processes, but it also increases worker safety. To reduce waste of motion, worker movements should be kept small wherever possible. For example, instead fully extending arms when reaching for parts, movement can be reduced by using only arms and forearms.
The seven areas of waste seem interconnected; improving or modifying one area could have direct effects on other areas. For example, reducing transportation waste could force manufacturers to settle for suppliers close to their point of use. This could lead to problems with quality and increase defects, thereby increasing the waste of defects. Also, decreasing inventory (especially of raw material) to reduce inventory waste could lead to shortage of parts and eventually increase waste of waiting. In such cases, which waste should be minimized? Should this decision be based purely on cost, or on quality or a little bit of both?
 http://www.emsstrategies.com/dm090203article2.html http://www.lean-manufacturing-junction.com/waste-of-overproduction.html http://www.lean-manufacturing-junction.com/waste-of-defects.html http://www.lean-manufacturing-junction.com/waste-of-inventory.html http://www.lean-manufacturing-junction.com/waste-of-overprocessing.html http://www.lean-manufacturing-junction.com/waste-of-transportation.html http://www.lean-manufacturing-junction.com/waste-of-waiting.html http://www.lean-manufacturing-junction.com/waste-of-motion.html