Taiichi Ohno, the father of the Toyota Production System, stated that all we are trying to do is to reduce the time it takes from receipt of order to receipt of cash by reducing as much waste and non-value-added activity from the process as we can. This is what is commonly referred to as lean.
Most production systems are based on Toyota’s system. Many systems will be developed around a house in which, at the roof level, there are the overriding principles by which they operate — things such as customer satisfaction, best in class, lowest cost, and quickest to market, to name just a few. Holding up the roof are those items that drive improvement in the system — just in time, continuous improvement, cellular production, jidoka (quality built in), pull systems, and eyes for waste. And holding up the pillars is a good foundation consisting of standard work, total productive maintenance, 5S, and visual controls (Figure 1).
Figure 1. Standard work, total productive maintenance, 5S, and visual controls are a good foundation for holding up the pillars of a production system.
Almost every company has something similar. What I find most interesting is that when I am in a company and ask them what their wastes are, the majority of the time the answer to this question is a blank stare. After a few minutes, they may be able to come up with one or two of them, but it’s seldom that they can come up with all of them. So, before continuing, if you’ve identified a certain number of wastes that you look for in your organization, list them now. To help you, I’ve provided a few acronyms that I use to jog my memory. Some companies, such as Toyota, have identified seven wastes — transportation, overproduction, motion, defect, waiting, inventory, and processing (TOMDWIP). For eight wastes, which seems to be the standard these days, the common acronym is DOWNTIME — defects, overproduction, waiting, non-utilized/underutilized talent, transportation, inventory, motion, and excess processing. And some companies identify as many as 10 wastes — complexity, labor, overproduction, space, energy, defects, materials, idle materials, time, and transportation (CLOSEDMITT). So, pick one and write down the wastes that you have identified in your company.
Why is being able to identify the waste so important? To have the ability to “reduce the time it takes from receipt of order to receipt of cash by reducing as much waste and non-value-added activity from the process as we can” we must know them and look for them every time we’re watching the process or just walking in the environment, whether it is the manufacturing floor, the maintenance workshop, or the office.
The power of observation
One of my favorite stories about Taiichi Ohno was how he would draw a box on the floor and have the person that he was instructing stand in the box, not talk to the operators, and watch the process, and then report what was observed. The lesson behind this is that in order to see the true condition you need to be where the action is happening, not sitting in the office, unless that is where the action is happening, and you need to be able to watch and see the wastes. How can you see the wastes if you don’t know what they are?
I tried this exercise one time. I had an engineer who worked for me go out to the floor and observe the assembly of an electrical panel. I knew that this particular electrical panel, from beginning to end, would take about four hours to assemble. So I instructed him to come in the next morning and watch the process. I even went so far as to say, “Just observe. Don’t talk to the operators. Just observe.” In retrospect, I must not have put enough emphasis on the “just observe” part, because the next morning when I arrived he was sitting at his desk. I knew he could not have observed the entire process yet, so I asked him how it went. He said that it went great — he arrived in the morning and watched as the operator set up for the day. He explained to the operator that he would be watching the process so that he could understand how the process progressed. The operator informed him that it would take about four hours to assemble this particular assembly and he could just tell him what he did. This took about 30 minutes and he was back at his desk. What he did not see was all the wastes that occurred during the process in order to build this particular electrical panel — things such as looking for tools and materials, traveling across the plant in order to retrieve needed items, or going into the other workstations to get tools that were “borrowed” during the night shift.
Before we go on to the wastes, let’s review value-added vs. non-value-added activities. I’ve heard several definitions of what is value-added vs. non-value-added, but the one that I like most is: “value-added activities are those that the customer is willing to pay for and will normally change the form, fit, or function of the product.” This isn’t always easy to ascertain. So, is inspection a value-added or non-value-added activity? I would say that it is a non-value-added activity, because as a consumer I would hope that the processes are in place to produce a quality product. Inspection is something that the company does in order to prevent bad product from getting to the customer. This could be one of those non-value-added tasks that is necessary for the business, but it is still a non-value-added task. All of the wastes that we are about to review fall into the non-value-added category.