The seven forms of waste is a concept within Lean management that can help you reduce waste and save money for your business. Reducing waste is essential for every company. Wasteful activities can lead to a decrease in profits, unnecessary environmental impacts, decreased employee satisfaction, and overall reduction in quality.
To reduce waste, you must begin by optimising processes; this will allow you to eliminate or improve activities that do not add value to your business. It might sound too good to be true but follow the seven wastes of Lean and it will be more than possible – we promise. Lean management identifies the following areas (or forms of waste) that can be easily optimised.
The first area of waste is one a lot of business owners won’t be expecting. Companies will often find they have an excess of inventory. Perhaps it was in hopes of dealing with production delays, meeting unexpected demands, or simply a result of bad quality goods. Either way, having to overstock will only lead to waste. An excessive inventory will not add value to your company but will increase the cost of depreciation and storage, too.
It might seem like an obvious one, but waiting is a form of waste that often slides under the radar. This could include when goods are waiting to be delivered, a document is waiting to be signed, or a piece of equipment is waiting to be fixed.
All of these are time wasting processes, but they can be easily detected and limited.
Defects are not just an unnecessary annoyance; they can result in having to go through multiple processes of rework and production. As a result, this can cost valuable time, money, and extra labour.
Ultimately, anything the customer is not paying you for, is waste. In fact, overproduction can be the catalyst for all the other wastes of Lean. For example, excess production can lead to products that require additional storage, extra transportation, and usually, longer waiting times. If the demand isn’t there, overproduction will be nothing more than costly and detrimental.
Motion is a type of waste that refers to the literal movement of machinery or employees within work processes. Companies have realised that the more motion is involved in these processes, the higher the likelihood of mistakes, greater production times, and even injuries. Limiting motion will help to decrease these risks.
Speaking of motion, transportation can cause waste when resources or goods are moved without much purpose. If there isn’t any extra value in the transportation process, this will only cost you more time and money. Moreover, transportation always poses a risk for damages to occur, especially when it is unnecessary.
Much like overproduction, over-processing means to carry out work or processes that don’t bring additional value to your business. These can often be experienced when unnecessary features or processes are used in manufacturing. In such instances, it simply takes up valuable resources without increasing profit.
The seven forms of waste can be tough to control. Once they are recognised, however, improving work processes and optimising resources can have advantageous effects on your business, profits, and reduction of waste.