8 Wastes of Lean Manufacturing in a Services Context

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Debashis Sarkar
04/06/2009

Defining "Waste" As it Applies to Service Organizations

Anything that does not add value to the customer is a waste. Waste only adds to time and cost.And the definition of "waste" in a service organization is quite similar to its Lean manufacturing definition.

When you look at a process, this customer could be an external customer/end user (consumer) for a process that has an impact on customers. For an internal process of an organization, this refers to an internal customer. Examples of the process of the former types include: sales, marketing, production, etc. The examples of the process in the later bucket include training, recruitment, administration, etc.

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The 8 Wastes of Lean Manufacturing

Kudos to Taichi Ohno, the father of Toyota Production System. His 8 wastes of Lean manufacturing have a universal application. Despite what some practitioners may say or write, the 8 wastes of Lean are applicable not just in a Lean manufacturing system but also in services. Take any context and you'll see for yourself the applicability of the wastes as expressed by Ohno.

Table 1 summarizes the 8 wastes of Lean with examples from services. I have kept a column empty for you to fill with the ones that are visible in your own company.

Type of waste	What is it?	Examples
Waste of Over-production	Processing too soon or too much than required	• Information sent automatically even when not required • Printing documents before they are required • Processing items before they are required by the next person in the process
Waste of Defects	Errors, mistakes and rework	• Rejections in sourcing applications • Incorrect data entry • Incorrect name printed on a credit card • Surgical errors
Waste of Inventory	Holding inventory (material and information) more than required	• Files and documents awaiting to be processed • Excess promotional material sent to the market • Overstocked medicines in a hospital • More servers than required
Waste of Over-Processing	Processing more than required wherein a simple approach would have done	• Too much paperwork for a mortgage loan • Same data required in number of places in an application form • Follow-ups and costs associated with coordination • Too many approvals • Multiple MIS reports
Waste of Transportation	Movement of items more than required resulting in wasted efforts and energy and adding to cost	• Movement of files and documents from one location to another • Excessive e-mail attachments • Multiple hand-offs
Waste of Waiting	Employees and customers waiting	• Customers waiting to be served by a contact center • Queue in a grocery store • Patients waiting for a doctor at a clinic • System downtime
Waste of Motion	Movement of people that does not add value	• Looking for data and information • Looking for surgical instruments • Movement of people to and fro from filing, fax and Xerox machines
Waste of Un-utilized People	Employees not leveraged to their own potential	• Limited authority and responsibility • Managers common • Person put on a wrong job
Waste of Over-production	Processing too soon or too much than required	• Information sent automatically even when not required • Printing documents before they are required • Processing items before they are required by the next person in the process
Waste of Defects	Errors, mistakes and rework	• Rejections in sourcing applications • Incorrect data entry • Incorrect name printed on a credit card • Surgical errors

Table 1 — 8 Wastes of Lean Manufacturing with Examples From Service Organizations

In Conclusion of the 8 Wastes of Lean Manufacturing

The above definition of the 8 wastes of Lean should be looked at as something that is directional and should always be kept in mind while taking up a Lean optimization project. These are also called Non-Value Added activities, and I have seen processes in service business wherein up to 95 percent of the time is spent on these Non-Value Added activities. I shall talk about the concept of Value Added/Non-Value Added/Business-Value Added activities in my next column. Understanding this concept is a must for dissecting a process for Lean transformation.

Appreciating waste in a service business can be quite challenging as many of the activities do not happen before one’s eyes. What is needed is the usage of value stream mapping, which helps bring out the tacit wastes in a process. This has to be supported with sharp judgment of the change agents that are catalyzing the process improvements.

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Topics: Lean Six Sigma