The 7 "Deadly" Wastes That Could Cost Your Company

At their core, Lean principles (or just "Lean") focus on the creation of value for the end customer. Lean examines every activity within a process and filters it through a rigid definition, categorizing it as either value-added or non-value added.

By definition, if an activity consumes resource time or capital but does not add value, it must be wasteful and should be eliminated.

In nearly every organization, 95 percent or more of the activities and time in business processes do not add value. The goal of Lean is to root out these activities and quickly eliminate them.

Waste is the Enemy of Lean Principles

There are seven widely recognized categories of waste within processes:

1. Defects – work performed incorrectly that must ultimately be accurate in order to create value.
2. Work In Process – build-ups of queues and transactions, which have not been completed to the customer’s specifications. Partially completed work consumes resources, but the customer is not willing to pay for it.
3. Overproduction – doing activities earlier than necessary. Typically leads to accumulated work in the process.
4. Waiting – people and transactions idled due to work imbalances, defects or other root causes.
5. Motion – unnecessary human movement required to complete a transaction or customer request.
6. Transportation – movement, either physically or electronically, of a customer transaction that consumes resources and costs, but is not required to satisfy the customer.
7. Over processing – excess activity or steps that do not add value to the service or product for the end customer.

In practice, Lean principles engages employees throughout an organization, in particular those who know the actual processes best, to examine processes through the lens of the seven forms of waste. While the discipline required to implement Lean can often seem counter-cultural, the potential value cannot be understated.

The bottom line is that Lean focuses on creating processes that produce the right product or service, in the right quantity at the right time with the minimum amount of effort, resources, capital and time.